Property, Howell, Fall 2000 & Spring 2001

Howell’s office: room 2141) Exams: closed book, but will be given clean copy of syllabus, use full sentences except in last

10 minutes or so when can use point format2) Final exam: covers whole year, about 75% spring term material, 25% from fall (tenures, estates,

trusts, uses most likely, possibly support – may examine same thing twice, so look at Christmas exam). A clean copy of the Perpetuity Act will be provided.

3) Dictionary:a) Disposition = both a bequest of personalty and a devise of realty

i) Bequeath/legacy = a gift of personalty by willii) Devise = a gift of realty by will

b) Devolve = passing property from one to another, not be a positive act but rather by operation of the law

c) Deed = instrument that conveys an interest in land inter vivos (i.e. while living)

ContentsContents............................................................................................................................................1Cases / Statutes.................................................................................................................................4Proprietary interests and classification of property..........................................................................8

Proprietary interests against the world, protected by torts, possession (bailee) v. ownership.....8Realty (corporeal, incorporeal hereditaments) and Personalty (chattels real, chattels personal). 8

How high and how deep does land ownership go?...........................................................................9Maxim – Cujus est solum ejus est usque ad coelum et ad inferos................................................9Literal meaning of maxim – acceptance of “up to heavens” for overhanging sign, trespass.......9Limit on maxim – necessary for ordinary use/enjoyment of land – so aircraft do not trespass.. .9Reiterates up to use/enjoyment; and can prevent others gaining rights to space above land.....10Nuisance – own airspace for useful tower, though causes concern for airport (prior warning).10Nuisance – up to “necessary for ordinary use” – useless structure blocking aircraft has to go. 10Can protect airspace over land even if poor motives: low, fixed over-swinging crane trespasses....................................................................................................................................................11Over-swinging crane does trespass, but poor motives of plaintiff, so postponed injunction.....11Maxim applies underground – people in cave trespass (no access) – now mostly statutes........11Property only if under dominion – gas underground, water, wild animals (feræ naturæ)..........11

Fixtures...........................................................................................................................................12Fixtures in personalty: greater absorbs smaller (separate existence, separated no damage)......12Fixture? Consider degree (how well fixed) & object of annexation (for sake of chattel or land)....................................................................................................................................................12Leading BC case: prima facie fixture if attached, but objective degree & object tests to refute....................................................................................................................................................12Since no restrictive covenant, sign is fixture (dissent: sign should speak for itself)..................13Machinery attached to steady it is fixtures, and so are constructive fixtures (e.g. forklift truck)....................................................................................................................................................13Non LaSalle/Stack approach in Ontario – consideration of subjective intention.......................14

Use and flow (quantity and quality) of water.................................................................................14Three categories of water: surface water, water in watercourse, percolating water...................14

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Common law riparian rights: ordinary use, extraordinary use, flow and access in watercourse....................................................................................................................................................15B.C. Water Act: title/use all “stream” water to Gov, unless license, unrecorded water/domestic....................................................................................................................................................15Opinion 1) – riparian rights still exist except as against party with Water Act license..............16Opinion 2) – although judge said didn’t need to decide matter, riparian rights extinguished....16Opinion 2) – in B.C.S.C. judgement, obiter dictum = riparian rights extinguished...................17Conflicting opinions in BC – must discuss both in any case, but 2) probably more persuasive17Percolating water can be extracted by landowner for any purpose (including wasting it).........171989: groundwater not yet in Water Act, nuisance to pollute ground or watercourse water.....181995: Water Protection Act vests all groundwater in government, hence Water Act applies....18

Ownership of bed of water areas....................................................................................................18Foreshore, tidal or navigable Prov, non-tidal & non-navigable ad medium applied in the past 181886: ad medium applies, even if bed not coloured or area included, unless known intention. 19Even Torrens system ad medium still applies to “bounded” by non-tidal/non-navigable stream....................................................................................................................................................19Land Act, S.B.C. 1961 following Rotter phases out ad medium rule........................................20Does ad medium rule apply to Indian reserves – probably, but not decided since navigable....20

Access, Navigation.........................................................................................................................20Riparian rights include access, right to cross foreshore, mooring, not construct on foreshore. .20Navigable rights if in natural state useful as public highway: commerce/predictability............20

Support............................................................................................................................................21Right of support (lateral and subjacent) of land in its natural state (i.e. without additions).......21Support includes indirect i.e. not to facilitate wind/rain by excavations on adjoining land.......21But if wind naturally blows sand off land (and neighbor then prevents its return) no action....21Lateral support only for natural land not weight of buildings, but was liable for vertical.........22Not entitled to lateral support for increased pressure by building, but generally with vertical..22“Fill” on land is not natural part of land, so no right of lateral support for it.............................22No absolute right to support by or extract percolating water – negligence & nuisance available....................................................................................................................................................23

Accretion.........................................................................................................................................24Accretion = gradual and imperceptible growth (or erosion) of land, or receding water............24Time accretion begins relevant, can’t be foreshore, policy issues (e.g. “manurable”) irrelevant....................................................................................................................................................25Accreted land must go out, not come up – deposits should attach to adjoining land, not bed...25Accretion includes windblown sand, imperceptible = can’t see consolidation / stable advance....................................................................................................................................................25Upland border of Crown “strip” is not mobile “snake” unless explicitly described as such......26

Tenures (pyramid), estates (legal title), trusts (equitable holding for another’s benefit)...............26Tenures = pyramid of relationships, King-tenants in chief-mesne-demesne (now unimportant)....................................................................................................................................................26Estates: “unGodly jumble” but flexible: fee simple/tail, life, reversion, remainder, autre vie...27Equity – “use” on the “use” became modern trusts (holding title for use/benefit of another). . .28Trust used to create flexible estate-like succession for personalty (splits legal title from use)..30Successive legal interests in personalty with wills: title in ultimate holder + other life interest31Common law: marital unity, life estates curtesy & dower, “use” for separate equitable interest....................................................................................................................................................32

Alienability, Torrens land title system, Indefeasibility..................................................................33

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Alienability – source in 1290 Quia Emptores, completed in 1660 Abolition of Tenures Act. . .33Mechanics of transfer: from historical livery of seisin to modern documentation.....................33Conveyancing: Common law, Deeds registration, Torrens Title registration............................34General Principle of Indefeasibility: curtain drawn over previous errors, mirrors situation......35Exceptions to Indefeasibility: lease (up to 3 years) with occupation, builder’s/mechanic’s lien....................................................................................................................................................35Exceptions: fraud/forgery without knowledge – from deferred to immediate indefeasibility. . .35S.29 notice of unregistered interest no effect, but actual/constr knowledge+dishonesty = fraud....................................................................................................................................................38Indefeasibility is to protect bona fide purchasers for value, not just registered owners.............39

The Fee Simple...............................................................................................................................40Creation: words of purchase v. limitation, no longer strict need for “and his heirs”.................40Repugnancy: if give absolutely cannot control it’s destiny – intention in wills, formal in deeds....................................................................................................................................................41

The Life estate................................................................................................................................43Creation by express words “for life”, by statute, pur autre vie and devolution on death...........43Family Relations Act (community property regime on breakdown) & Wills Variation Act.....44Common law: resulting trust, constructive trust (equitable remedy avoids unjust enrichment) 45

Waste and Life Estates (and other relationships)...........................................................................46Legal waste: permissive (passive), voluntary (active), includes ameliorating...........................46Equitable waste: no unconscionable waste (even if unimpeachable) and to other relationships....................................................................................................................................................47Obligation/cannot benefit by not paying taxes, can’t sell against remainderman’s wishes.......48

Aboriginal property........................................................................................................................49History of aboriginal land title claims in B.C.............................................................................49Delgamuukw: reconciliation, content, inherent limits, spectrum, proof, justified infringement49Aboriginal cultural artefacts/chattels, held in museums, seeking return....................................52

Co-ownership – concurrent estates.................................................................................................53Co-ownership (unity of poss), TIC (shares), JT (each owns whole + 3 unities + survivorship)53Creation: old CL preferred JT, but now lack of unity/words of severance/statute TIC.........56Relations between co-owners: can ask to account if unfairly sharing profits, but not for labour....................................................................................................................................................59Expenses: common obligation & at request & option adopted v. no option/equity on partition....................................................................................................................................................59Severance overview: destroy unity, mutual agreement (express or implied), other unilateral?.61Destroy unity: transfer/trust yes, mortgage/lease/divorce?, agree to sell/will/uni declaration no....................................................................................................................................................63Severance by mutual agreement – express or implied by course of dealings/actions as if TIC.67Severance by unilateral act that falls short of breaking a unity – likely in UK, unlikely in B.C.....................................................................................................................................................68Partition and sale: history and the B.C. Partition of Property Act..............................................69Only those with right of possession may seek partition (e.g. not creditors, remainderman, etc)....................................................................................................................................................70Court discretion: may focus on equitable “clean hands” maxim or on statutory discretion.......70

Future Interests...............................................................................................................................72Conditions precedent (contingent) v. conditions subsequent (vested) v. absolute vesting........72Common Law future interests: reversions, remainders, rights of entry, possibility of reverter. 77

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Rules restricting remainders, avoided by legal executory interests & equitable future interests....................................................................................................................................................80Attributes of future interests: protection from equitable waste, alienability, registration..........84Validity of conditions/events, restraints on alienation...............................................................85

The rule against perpetuities, the Perpetuity Act............................................................................87CL rule against perpetuities: contingent interest must vest, if at all, within perpetuity period. .87Statute law: the Perpetuities Act – common law rule still applies, but adds a safety net...........89Examples showing common law rule against perpetuties..........................................................91Examples also showing use of safety net in Perpetuity Act.......................................................93

Incorporeal interests........................................................................................................................99Introduction: distinguish contracts (don’t bind future owner) from incorporeal hereditaments 99Easements...................................................................................................................................99Profits a Prendre: to take part of land, has implied right of entry, can be in “gross”...............102Leases: exclusive occupation (not for licensee), privity of estate “touch and concern” land. .103Covenants intro: contract-like, if privity of contract or estate (touch/concern) binds 3rd parties..................................................................................................................................................103Covenants & Common Law.....................................................................................................103Covenants & Equity: will bind burden if negative, benefits dominant tenement, and notice. .105Creation of Covenants: need to register them, but being registered doesn’t prove them.........107Licence: permission for licensee to do otherwise illegal thing on licensor’s land, differs lease..................................................................................................................................................107Licenses: Bare, coupled with land interest (e.g. profit), and new irrevocable contractual.......1073rd party successor bound by license unless bona fide purchaser for value without notice.. . .109

Personal property..........................................................................................................................110Finders: rights + obligation to true owner, who exerted most control......................................110Bailment: taking of possession/control, returning same object, obligation to take care..........113Sub-bailment: if sub-bailee knows bailee not owner, then liable to owner, limits not applicable..................................................................................................................................................115

Gifts..............................................................................................................................................116Gifts: capacity to give & receive, inter vivos requires intent and delivery (cohabiting tricky)..................................................................................................................................................116

Cases / StatutesA.G. B.C. v. Neilson (1956) (S.C.C.).................................................................................................25A.G. of Manitoba v. Campbell (Man. Q.B.) (1983).....................................................................10, 17Administration Act Amendment Act..................................................................................................32Andrews v. Partington..................................................................................................................89, 98Austerberry v. Oldham Corporation, (1885) (Ch. Div.)...................................................................104Bata v. City Parking (1974) (Ont.C.A.)............................................................................................115Bernard v. Bernard, (1987) B.C.S.C...................................................................................................61Bernstein of Leigh v. Sky Views and General Ltd. (1977) (English Q.B.)..............................9, 10, 11Blackburn and Cox v. McCallum, (1903) S.C.C................................................................................85Bradford v. Pickles (1895) (English H.L)..........................................................................................17Bremner v. Bleakley (1924) (Ont.App.Div.)......................................................................................21Brown v. Moody, (1936) P.C.............................................................................................................73Bull v. Bull, (1955) C.A.....................................................................................................................58Canadian Commercial Bank v. Island Realty (1986) (B.C.)..............................................................37

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Canadian Exploration Ltd. v. Rotter (1960) (S.C.C.).........................................................................19Carr v. Rayward (1955) (B.C. Co.C.).................................................................................................35Central Station v. Shangri-La (1979) (B.C.S.C.)................................................................................38Chasemore v. Richards.......................................................................................................................17City of New Westminster v. Kennedy (1918) (B.C. Co. Ct.).......................................................47, 85Clarke v. Clarke, (1890) S.C.C...........................................................................................................57Cleland v. Berberick (1915) (Ont H.C.).............................................................................................21Cook v. City of Vancouver (1912) (J.C.P.C.)....................................................................................16Crawford v. Kingston.......................................................................................................................114Creelman v. Hudson Bay Insurance (1920) (J.C.P.C.).......................................................................35Delgamuukw v. British Columbia (1997) (S.C.C.)............................................................................49Diamond Neon (Manufacturing) Ltd. V. Toronto Dominion Realty Co. Ltd. (1976) (B.C.C.A.).....13District of North Saanich v. Murray (1975) (B.C.C.A.).....................................................................20Dukart v. Surrey, (1978) (S.C.C.).....................................................................................................101Duke of Norfolk..................................................................................................................................88Edwards v. Sims, Judge (1929) (Kentucky C.A.)...............................................................................11Errington v. Errington & Woods (1952) (C.A.)...............................................................................109Festing v. Allen, (1843) Exch.............................................................................................................76Flannigan v. Witherspoon, (1953) B.C.S.C........................................................................................67Foort v. Chapman, (1973) B.C.S.C....................................................................................................65Frazer v. Walker (1967) (J.C.P.C.).....................................................................................................36Gibbs v. Messer (1891) (J.C.P.C.)......................................................................................................36Gillies v. Bortolullzi (1953) (Man. Q.B.)...........................................................................................22Ginn v. Armstrong, (1969) B.C.S.C...................................................................................................68Grafstein v. Holme & Freeman (1958) (Ont. C.A.)..........................................................................111Halsall v. Brisell, (1957) (Ch. Div.).................................................................................................105Hammonds v. Central Kentucky Natural Gas Co. (1934) (Kentucky C.A.)................................11, 17Harmeling v. Harmeling, (1978) B.C.C.A..........................................................................................70Hashem v. Nova Scotia Power Corp. (1980) (N.S.S.C.)....................................................................10Haywood (1881) (C.A.)....................................................................................................................106Heffron v. Imperial Parking (1974) (Ont. C.A.)...............................................................................115Hermanson v. Martin (1983) (Sask. Q.B.)..........................................................................................37Hiltz v. Langille (1959) (N.S.S.C.).....................................................................................................46Hounslow London Borough Council v. Twickenham Garden Dev. (1971) (English Ch. Div).......107Johnson v. Anderson (1937) (B.C.S.C.).......................................................................................16, 17Kelson v. Imperial Tobacco (1957) (English Q.B.)..............................................................................9Kowal v. Ellis (1977) (Man. C.A.)...................................................................................................112L&R Canadian Enterprises Ltd. V. Nuform Industries Ltd. (1984) (B.C.S.C.).................................13Land Act.............................................................................................................................................20Land Registry Act...............................................................................................................................35Land Title Act.....................................................................................................................................35LaSalle Recreations Ltd v. Canadian Camdex Investment Ltd. (1969) (B.C.C.A.).....................12, 14Leigh v. Dickeson (1884) (C.A.)........................................................................................................60Lesson v. Jones (1920) (N.B.C.A.)...................................................................................................114Lewvest Ltd. V. Scotia Towers Ltd. (1981) (Nfld. S.C.)...................................................................11Lichty v. Voigt (1977) (Ont. Co. Ct.).................................................................................................14London County Council (LCC) v. Allen, (1914) (C.A.)..................................................................106Lyons v. Lyons, (1967) (S.C. Vict. Australia)....................................................................................64

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M v. H (1999) (S.C.C.).......................................................................................................................44Mastron v. Cotton (1926) (Ont. App. Div.)........................................................................................60Mayo v. Leitovski (1928) (Man. K.B.)...............................................................................................48Me-N-Ed’s Pizza v. Franterra (1975) (B.C.C.A.)...............................................................................38Mickelthwaite v. Newlay Bridge Co. (1886) (English C.A.).............................................................19Morris v. C.W. Martin (1965) (English)...................................................................................114, 115Morris v. Howe (1982) (Ont. H.C.)....................................................................................................48Morrow v. Eakin and Eakin, (1953) B.C.S.C.....................................................................................70Munroe v. Carlson, (1976) B.C.S.C...................................................................................................68Murdoch v. Murdoch (1975) (S.C.C.)................................................................................................45National Provincial Bank v. Ainsworth (1965) (English H.L.)........................................................110Nicholson v. Riach (1997) (B.C.S.C.)................................................................................................39North Vancouver v. Carlisle, (1922) B.C.C.A...................................................................................64Pacific Savings v. Can-Corp (1982) (B.C.C.A.).................................................................................39Parker v. British Airways Board (1982) (English)...........................................................................112Parkinson v. Reid, (1966) (S.C.C.)...................................................................................................105Pells v. Brown (1621).........................................................................................................................82Peter v. Beblow (1993) (S.C.C.).........................................................................................................46Pettkus v. Becker (1980) (S.C.C.)......................................................................................................45Phipps v. Ackers, (1842) H.L.............................................................................................................75Phipps v. Pears, (1965) (C.A.)..........................................................................................................101Public Trustee v. Mee, (1972) B.C.C.A.............................................................................................65Pugliese v. National Capital Commission (1977) (Ont. C.A.)...........................................................23Punch v. Savoy (1986)......................................................................................................................116Purefoy v. Rogers (1671)....................................................................................................................83R. v. Lewis (1996) (S.C.C.)................................................................................................................20Rathwell v. Rathwell (1978) (S.C.C.).................................................................................................45Rayner v. Rayner, (1956) B.C.S.C.....................................................................................................70Re Airey (1921) (Ont. H.C.)...............................................................................................................40Re Bancroft Eastern Trust Co. v. Calder, (1936) (N.S.S.C.)..............................................................56Re Barton Estate, (1941) S.C.C..........................................................................................................76Re Brown, (1954) Ch. Div..................................................................................................................86Re Bulman (1966) (B.C.S.C.).............................................................................................................25Re Carlson, (1975) B.C.S.C................................................................................................................74Re Cole (1963) (C.A.)......................................................................................................................117Re Crow (1984) (Ont. H.C.)...............................................................................................................84Re Davis (1954) (Ont. H.C.).........................................................................................................12, 14Re Ellenborough Park, (1956) (English C.A.)..................................................................................100Re Fraser (1974) (B.C.C.A.)...............................................................................................................31Re Leach, (1912) Ch. Div...................................................................................................................86Re McKellar, (1972) Ont. H.C...........................................................................................................79Re Messinger Estate, (1969) B.C.S.C.................................................................................................87Re Ottewell (1969) (S.C.C.)...............................................................................................................40Re Porter, (1907) Ont. Div. Ct............................................................................................................86Re Richer (1919) (Ont App. Div.)......................................................................................................41Re Robson, (1916) (Ch. Div.).............................................................................................................83Re Shamas (1967) (Ont. C.A.)............................................................................................................42Re Squire, (1962) Ont. H.C................................................................................................................73

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Re Swan (1913) (English Ch. D.).......................................................................................................30Re Tilbury West Public School Board and Hastie, (1966) (Ont. H.C.)..............................................79Re Tremblay and Township of Tay (1984) (Ont. C.A.).....................................................................42Re Tuck (1949) (English)...................................................................................................................87Re Walker (1925) (Ont. App. Div.)....................................................................................................41Re\...........................................................................................................................................................

Sorenson & Sorenson, (1977) (Alta. App. Div.).....................................................................66, 69Robb v. Robb (1993) (BCSC)............................................................................................................57Schillinger and Ponderosa Trout Farm v. H. Williamson Blacktop & Landscaping Ltd, (1977)

(B.C.S.C.).......................................................................................................................................16Smith & Snipes Hall Farm v. River Douglas Catchment Board (1949) (C.A.)...............................103Sorochan v. Sorochan (1986) (S.C.C.)...............................................................................................45Southern Centre of Theosophy v. South Australia (1981) (Privy Co.)..............................................25Spelman v. Spelman, (1944) (B.C.C.A.)............................................................................................59Stack v. T. Eaton Co. (1902) (Ont Div.Ct.)........................................................................................12Steadman v. Erickson Gold Mining Corp. (1987) (B.C.S.C.)............................................................17Steadman v. Erickson Gold Mining Corp. (1989) (B.C.C.A.)...........................................................18Stonehouse v. A.G. of B.C., (1963) S.C.C.........................................................................................63Tataryn v. Tataryn estate (1994) (S.C.C.)..........................................................................................44The Queen in right of Manitoba v. Air Canada (1980) (S.C.C.)........................................................10Tulk v. Moxhay, (1848) (Ch. Div)...................................................................................................105Vane v. Lord Barnard (1716) (English)..............................................................................................47Walker v. Dubord (1992) (B.C.C.A.).................................................................................................69Water Act............................................................................................................................................15Welsh v. Marantette (1983) (Ont)................................................................................................20, 22Whitby v. Mitchell..............................................................................................................................88Woollerton & Wilson Ltd. V. Richard Costain Ltd. (1969) (English Ch.D.)....................................11

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Proprietary interests and classification of property

Proprietary interests against the world, protected by torts, possession (bailee) v. ownership1) Protects special proprietary interest in some subject matter against all the world (compare with

contract, and notion of privity to contract)2) Torts used to protect proprietary interest e.g. trespass to land, trespass to chattels, conversion,

private nuisance (interference by act or omission without authority with use and enjoyment of land), detinue (wrongful detention of personalty), negligence

3) Subject matter includes debts, shares, trademarks, and ever expanding e.g.a) personality of celebrities (e.g. use of face in advertising) developed initially as privacy issue

(i.e. mental suffering by having privacy invaded) in US, but celebrities put themselves into public eye all the time. Really about money, so US gave propriety rights, calling it right of publicity. In Canada, called appropriation of personality, a tort.

b) Note how different subject matter would be in USSR – no private land and means of production.

c) Limit on subject matter e.g. neighbour provided grandstand and broadcast of neighbours horse races. Courts said “business value” not property, so its appropriation not protected by tort.

4) Bailment of chattels (not land) good example since brings together property, contract and tort – e.g. lend you my car, you become bailee, have possession property right so can protect it by tort, but this vanishes when someone comes along with stronger property right e.g. ownership.

Realty (corporeal, incorporeal hereditaments) and Personalty (chattels real, chattels personal)1) Property classification developed case-by-case over 1000 years, coming from post-1066

Norman system of feudalism where land was all-important.2) Real property (realty) (i.e. subject historically to a real action i.e. one which would restore the

thing to the plaintiff rather than compensating)a) Corporeal hereditaments i.e. you can touch it, have possession of it e.g. land, and normally

anything attached to the land (i.e. fixtures) becomes a part of it e.g. buildings, crops, seeds (hereditaments means can be inherited)

b) Incorporeal hereditaments i.e. rights arising from land, but not land itself. Only 2 remain:(1) Easement i.e. a privilege without profit (e.g. a right of way over someone else’s land

(the dominant title), right to put drain or cable across it) given by grant (usually for a price) or by prescription (e.g. historically after 20 years got right of support for artificial structures from neighbours land)

(2) Profit á prendre (right to take the profit from land e.g. wheat, gravel)3) Personal property (personalty)

a) Chattels real i.e. a lease (historically a lease was simply a contract, but has become more like realty)

b) Chattels personal (“pure personalty”)i) Chose in possession (i.e. thing you can take possession of, tangible, corporeal; goods are

defined as chattels personal other than money or choses in action)(1) Fungible (i.e. each item considered identical, interchangeable e.g. raw materials – if

things sold as ‘so many units’ or ‘so much weight’ they are unascertained, and they become ascertained when the particular things are set aside for delivery; future goods such as wheat, cotton, steel, are the anticipated produce of agriculture or manufacture, and so they are unascertained and hence fungible)

(2) Non-fungible (i.e. individualized)ii) Chose in action i.e. abstract entity, only get value through legal action e.g.:

(1) Debts(2) Commercial paper i.e. written promises to pay or deliver, so standardized as to

represent the goods/money itself e.g. negotiable instruments (negotiability means anyone buying it in good faith obtains good title to it, even if defect in title of the transferor e.g. stolen):(a) Bill of exchange (e.g. buyer of goods doesn’t pay up front, gives bill of exchange

to seller i.e. an IOU, which can then be sold)(b) Promissory note(c) Cheque

(3) Documents of title e.g. bill of lading (i.e. receipt given by carrier for goods placed in transport by consignor, given to the consignee, who may then sell it to others)

(4) Industrial and intellectual property: copyrights, trademarks, patents(5) Stocks and shares

How high and how deep does land ownership go?

Maxim – Cujus est solum ejus est usque ad coelum et ad inferos“Whoever owns the soil, holds title up to the heavens and down to the depths”

Literal meaning of maxim – acceptance of “up to heavens” for overhanging sign, trespassKelson v. Imperial Tobacco (1957) (English Q.B.)1) Facts: Overhanging sign in airspace, protruding 8 inches into air above land controlled by lessee

(lessee, a retail tobacconist, gets property rights unless lease excludes them (hence the classification chattels real), so the fact that owner gave permission for sign immaterial).

2) Issues: action should be trespass, and not nuisance since nuisance comes from old action of “case”, which requires damage (trespass action does not, it is actionable per se)

3) Decision:a) Accepted maxim i.e. property right of airspace. Hence trespass. No question as to limits of

airspace rights.b) Noted Air Navigation Act expressly negated action of trespass for overflying aircraft, further

implies all airspace above is part of propertyc) Damages not appropriate here since don’t want plaintiff’s rights to be able to be bought – so

instead injunction appropriate to remove sign (a discretionary equitable remedy)

Limit on maxim – necessary for ordinary use/enjoyment of land – so aircraft do not trespassBernstein of Leigh v. Sky Views and General Ltd. (1977) (English Q.B.)1) Facts:

a) Defendant flew over (or nearly over) Plaintiff’s house to photograph it.b) Really a complaint of invasion of privacy for security reasons, but until recently privacy not

recognized by common law, and nuisance usually requires multiple actions, not just one photograph. So plaintiff claims trespass, even though photographs could be taken while overflying adjacent land.

2) Decision:a) If follow maxim and Kelson v. Imperial Tobacco (1957) (English Q.B.), would suggest

trespass.b) But distinguished Kelson on the facts, creating the rule:

i) Trespass if at a height necessary for the ordinary use and enjoyment of the land and structures upon it i.e. if it is contemplated owner might expect to make use of that airspace as a natural incident of the use of the land.

ii) Above that, land owner has no more right than any member of the publiciii) Policy – to balance rights of land owner with those of public in day of aircraft, etc.

Reiterates up to use/enjoyment; and can prevent others gaining rights to space above landThe Queen in right of Manitoba v. Air Canada (1980) (S.C.C.)1) Facts: Manitoba wanted to tax every plane (on value of aircraft and repair parts) that either flew

over or landed in Manitoba.2) Decision:

a) Maxim a ‘fanciful notion’ – no one, state or individual, can own airspace, it is publicb) Reiterates land ownership up to height for proper use and enjoyment of land from Bernstein

of Leigh v. Sky Views and General Ltd. (1977) (English Q.B.)c) Added owner can also prevent anyone else from acquiring title or exclusive right to space

above land (e.g. someone could not build walkway joining two towers high above my land)

Nuisance – own airspace for useful tower, though causes concern for airport (prior warning)Hashem v. Nova Scotia Power Corp. (1980) (N.S.S.C.)1) Facts: Plaintiff built airport, defendant then built transmission towers along a right-of-way

(easement) on adjacent land. Plaintiff says he cannot now use his airport.2) Claims: nuisance, not trespass case. Claiming both private and public nuisance:

a) Private nuisance = interference of an occupier’s use and enjoyment of landb) Public nuisance = interference with public at large in exercise of rights common to all (no

general right to bring suit in tort for public nuisance, except A.G. or someone who has suffered more than the general public for the amount of that extra suffering)

3) Decision: adjacent landowner owns the air space above it to height for transmission tower to exclusion of aircraft using nearby airporta) Other pilots felt they could still use airport if careful, so plaintiffs psychological worry. But

nuisance is based on objective, not subjective test.b) Right-of-way was in place, giving exactly the kind of notice that was required herec) Just because you were there first (i.e. flying over land before towers), doesn’t necessarily

give you the right to continue (i.e. to stop towers) i.e. previous flying doesn’t create highways in the sky

d) Nuisance not proven4) Comment:

a) If no pilots had been able to use land (objective test) but right of way was there beforehand, then probably still no nuisance

b) But if right of way was not there beforehand, then would probably be nuisance, leading to injunction to remove poles

Nuisance – up to “necessary for ordinary use” – useless structure blocking aircraft has to goA.G. of Manitoba v. Campbell (Man. Q.B.) (1983)1) Facts: Municipal airport (not private as in case above), aircraft approach over defendants land,

and he erected a “metal finger” tower, causing airport to stop night flights. Plaintiff claiming nuisance. Certainly defendant behaving badly, but maybe also province who could have asked feds for compensation to defendant under the Aeronautics Act.

2) Decision:a) Structure was not necessary for ordinary use of land – structure is completely useless

b) Plaintiff having a tantrumc) Structure has to go (i.e. it is a nuisance)

Can protect airspace over land even if poor motives: low, fixed over-swinging crane trespassesLewvest Ltd. V. Scotia Towers Ltd. (1981) (Nfld. S.C.)1) Facts: building contractor using crane that over swings plaintiffs land, saving contractor half a

million dollars. Plaintiff has no particular reason to complain, other than trespass (and hence possibility to then deal with plaintiff and make money – i.e. value of airspace only now that someone else wants to use it)

2) Decision: this is trespass, and even though plaintiffs reasons may have other goals, property rights must be protecteda) court seems to apply maxim/Kelson approach of sacrosanct nature of property)b) Didn’t discuss the ordinary use/enjoyment from Bernstein of Leigh v. Sky Views and

General Ltd. (1977) (English Q.B.)

Over-swinging crane does trespass, but poor motives of plaintiff, so postponed injunctionWoollerton & Wilson Ltd. V. Richard Costain Ltd. (1969) (English Ch.D.)1) Facts: defendant construction using crane that occasionally over swings plaintiff land, causes no

inconvenience, but plaintiffs claim trespass (to make more money?). If defendant couldn’t use crane, due to restricted site, construction would have to block street

2) Decision: (note pre-Bernstein so no mention of use/enjoyment). Assumed there was property rights, so granted injunction to remove crane, but postponed its application till defendant thought they would be finished (court obviously thought this a frivolous claim, but court didn’t want to set precedent to deny plaintiff)

Maxim applies underground – people in cave trespass (no access) – now mostly statutesEdwards v. Sims, Judge (1929) (Kentucky C.A.)1) Facts: Edwards owns land with an entrance to a cave, and turned it into commercial venture.

Lee wants to know if cave goes under his land (possible trespass), even though has no access to cave. Sims J. ordered a survey of cave to determine this. Edwards now trying to get a writ of prohibition to overturn that order.

2) Majority Decision: since it would be a trespass if cave goes under Lee’s land, even though Lee has no access, since land owner has property rights below surface.

3) Dissent: would not give title of cave under Lee away, but would say it is not a trespass at this time (unless perhaps shaft drilled down from Lee’s land). Analogy of below ground and airspace:a) Deserve property rights if can make use/enjoyment, but not otherwise (unless being

interfered with in use/enjoyment of surface)b) Deserve property rights if can bring it under dominion (i.e. with cave, need an entrance)c) Lee is trying to reap what he hasn’t sown (Edwards put in lot of work in discovery,

exploration, advertising, etc.)4) Today statutes cover natural resources such as minerals below ground, but common law still

applicable to caves

Property only if under dominion – gas underground, water, wild animals (feræ naturæ)Hammonds v. Central Kentucky Natural Gas Co. (1934) (Kentucky C.A.)1) Facts: defendant pumps gas into natural environment below ground as storage (so not a

constructed container). Plaintiff claims gas is trespassing below their land.2) Decision:

a) Assuming gas (not physical) can trespass, could have approached like in Edwards v. Sims (so yes, trespass) or applied use/enjoyment test (so no, not trespass – this is before Bernstein though).

b) But, drawing analogies with wild animals (feræ naturæ) and water, only your property when it is under your dominion (see dissent above) – when release it, goes back to wild state. Hence gas was a chattel when in artificial container, but after put it back underground doesn’t belong to anyone, so there can’t be a trespass, and anyone can pump it back out.

Fixtures

Fixtures in personalty: greater absorbs smaller (separate existence, separated no damage)1) Fixtures = joining together2) Example: start out with car chassis and 4 separate wheels, when put together have one item, a

car. If someone wants their wheels back, there are no wheels (only a car)3) Usual tests for personal property (see Ziff):

a) Main test: Usually the greater absorbs the smaller (greater/smaller in terms of market price)b) Could they have a separate existence in a useful sensec) Can they be taken apart without damage

4) Object can change its classification e.g. tree (realty) cut down lumber (chattel) built into house (realty)

Fixture? Consider degree (how well fixed) & object of annexation (for sake of chattel or land)Re Davis (1954) (Ont. H.C.)1) Facts: at common law widow had interest in one-third of husband’s realty estate. In this case,

does realty include bowling alleys which were clipped down to building (or are they chattels)2) Rule: identified 2 important issues:

a) Degree of annexation: how well connectedb) Object of annexation: why were they affixed – so that the thing affixed can be better used as

that thing, or in order to improve the land/building, such as enhancing its value or improving its usefulness for the purposes to which it is put i.e. for the sake of the chattel or the sake of the land

3) Decision: the bowling alleys are chattels (not fixtures) in this case because:a) Not much permanency and easy to remove, so suggests more like a chattelb) Affixation was so that bowling could be better carried out, rather than to improve building

(contrast dome building with hole in roof, then place in telescope)

Leading BC case: prima facie fixture if attached, but objective degree & object tests to refuteLaSalle Recreations Ltd v. Canadian Camdex Investment Ltd. (1969) (B.C.C.A.)1) Facts: Concerns a security interest (i.e. waiting for bill to be paid) in carpets laid down in hotel.

If they are fixtures, this interest should have been registered at the Land Registry Office, which it was not. If they are chattels, no problem. So which are they?

2) Rule: applied the rule from Stack v. T. Eaton Co. (1902) (Ont Div.Ct.) – memorize this:a) Prima facie characterization:

i) If not attached other than by own weight chattel ii) If attached even slightly fixtureUnless circumstances are clear for all to see (i.e. objective test) to show alternative intent by considering:iii) Degree of annexation andiv) Object of annexation

b) Most important: The intention of person affixing article is material only so far as can be presumed from degree and object of annexation (i.e. NOT interested in subjective reasons)

3) Decision: carpets are pinned down (so prima facie fixtures), buta) Degree of annexation is slight (removable with little difficulty, without causing non-trivial

damage), suggesting chattelsb) Object of annexation is more to improve building as a hotel (in which loose carpets are not

suitable) rather than improve use of carpets as carpets, suggesting fixtures.i) Note building classified as specialized (i.e. hotel with multiple rooms each with shower,

etc.) often will support argument that object of annexation is to improve building (e.g. telescope put in domed building with hole in roof). Of course hotel could be turned into hospital where carpets not wanted, so in more abstract sense could argue just a building with multiple rooms (i.e. level of abstraction important in how see relationship between chattel and land). Compare with bowling alleys above that do not make the building into a specialized bowling building (e.g. consider structural changes)

ii) Permanent rather than temporary annexation also considered to support fixture rather than chattel, but permanent was not thought to mean forever, rather for long enough time for article to serve its purposes

Court gave more weight to object of annexation than degree, and ruled carpets are fixtures.

Since no restrictive covenant, sign is fixture (dissent: sign should speak for itself)Diamond Neon (Manufacturing) Ltd. V. Toronto Dominion Realty Co. Ltd. (1976) (B.C.C.A.)1) Facts: Previous owner of land contracted with plaintiff sign maker to put in pole (sunk into

concrete) and attach sign to advertise business. Their contract said “sign” (does this mean pole and sign, or just sign) will remain property of plaintiff, only leased to previous owner, and is not to be deemed a fixture. Land sold and ended up with defendants, who then sold it again.

2) Issue:a) Contract with previous owner does not bind future owner of land unless registered against

title of land as a “restrictive covenant”, in which case it would “run with the land” (not the case here).

b) So issue here is: is the “sign” a chattel (in which case defendants committed tort of conversion) or fixture (in which case sign part of land and plaintiff has no remedy)

3) Decision: looking at the degree and object of annexation, they are fixtures, hence were part of land when defendant bought it, and so no conversion.

4) Dissent: the sign had a separate value, and was removed and sold (suggesting not a fixture). Also, a sign that relates to a particular occupant should be a chattel, but a sign that relates to the building should be a fixture i.e. sign can speak for itself (e.g. sign with address is fixture, but sign with doctors name on it is chattel). Qualification e.g. if a car lot, and likely to remain one, then generic sign “cars for sale” could be fixture.

Machinery attached to steady it is fixtures, and so are constructive fixtures (e.g. forklift truck)L&R Canadian Enterprises Ltd. V. Nuform Industries Ltd. (1984) (B.C.S.C.)1) Facts: 2 security interests involved, one in the building and another in the machinery. Mortgagor

purchased building from mortgagee, installed equipment (mortgaged from other chattel mortgagees) for manufacture of papier mâché pots. Much of machinery anchored to floor or building. On foreclosure, mortgagor claimed equipment was chattels, not fixtures, and so should remain with mortgagor (chattel mortgagees agreed). Building mortgagee however claims they are fixtures and so should stay with building on foreclosure

2) Issue: is this building just a general building with machinery inside (like building with bowling alleys in Re Davis (1954) (Ont. H.C.)) or is it specialized (like hotel in LaSalle Recreations Ltd v. Canadian Camdex Investment Ltd. (1969) (B.C.C.A.)).

3) Decision: court did not explicitly go through this question, but saw building and machinery as an integrated, whole entity.a) Degree of annexation: some evidence that removal of key parts of machinery would not be

straightforward (requiring torches to burn off bolts) and would cause substantial damage (to concrete floor slab for example), and fairly permanent affixing as well.

b) Object of annexation: Mortgagor claimed that anchoring was required only to provide stability, avoid vibration and make the operation safe. Court said attaching to steady machinery is not inconsistent with object of improving building.

c) Ruled that machinery is fixtures. Moreover, because building + machinery one operation, other tools not affixed at all (e.g. forklift truck, scales, and maybe backup parts) that are also required for the ordinary running of the operation are constructive fixtures. However, made distinction for new parts, not yet attached, and not required in current operation (the new holding tank) which remain chattels.

Non LaSalle/Stack approach in Ontario – consideration of subjective intentionLichty v. Voigt (1977) (Ont. Co. Ct.)1) Facts: Plaintiff put mobile home on farmland they had bought. They then sold farm to

defendant, with understanding on both sides that mobile farm would be removed by plaintiff. Due to muddy conditions, plaintiff could not remove mobile home by time sale was finalized, and upon learning about possibility it might now be theirs (Ontario Property Act states that when draw conveyance it includes everything not explicitly excepted) defendant claimed title to it.

2) Issue: was the mobile home a chattel or fixture?3) Decision:

a) Court looked at degree of annexation (e.g. septic tank and concrete padd) and concluded mobile home did have some degree of attachment, but could be removed relatively easily with little damage in this context (i.e. on farmland).

b) As to object of annexation, court rejected Stack test (used in LaSalle Recreations Ltd v. Canadian Camdex Investment Ltd. (1969) (B.C.C.A.) as a clear statement of the law. Instead looked at subjective intention, which was clearly that plaintiff intended it to remain a chattel (which the defendants understood).

Thus mobile home is a chattel, although some damages might be due to the defendants if there is damage on removal of mobile home.

4) Note: thus differing law in BC and Ontario, so could certainly argue for a subject intention test at the S.C.C.

Use and flow (quantity and quality) of water

Three categories of water: surface water, water in watercourse, percolating water1) Like wild animals and underground gas, cannot have title in water till capture it (although

scientific difference since water is always evaporating)2) Surface water: e.g. rainwater, snowmelt, water that “squanders” itself. In case of flood, at

common law can protect self in reasonable selfishness e.g. put up sandbags even if water then floods neighbour, but cannot pump water already on your land onto neighbours. I.e. no obligation to accept flow of surface water, unless perhaps if it is in a small gully or dip (not big enough to count as a watercourse) and heading to your land.

3) Water in watercourse: a defined channel either on surface of land or underground, is subject to riparian rights. Riparian land is land at border of land and water i.e. touched by water each day. Includes lakes and the sea (with the sea and tidal rivers, riparian land is that which goes down to the mean high water mark)

4) Percolating water: underground water, trickling/oozing like water through a sponge, no defined channel like underground stream (i.e. not a watercourse).

Common law riparian rights: ordinary use, extraordinary use, flow and access in watercourse1) These have now been mostly subsumed in by BC Water Act (i.e. they are mostly gone)2) Riparian rights described as a natural right, unlike a right such as an easement or servitude given

by grant i.e. they come naturally with the land. Also have right of support, and possibly of accretion.

3) Common law rights for riparian owners:a) Ordinary use – could take water in any quantity for ordinary purposes such as domestic and

watering stock (even to the point of exhausting water for downstream riparian owners)b) Extraordinary use – could take reasonable amounts of water for irrigation, manufacture, etc.,

so long as substantially returned so watercourse not significantly reduced in flow or character

c) Flow – downstream riparian owner entitled to a flow not substantially altered in volume or quality (pollution)

d) Access – to and from watere) Accretion and Drainage

4) History: riparian rights same from England which is wet, so not always appropriate in other places where water not to available

B.C. Water Act: title/use all “stream” water to Gov, unless license, unrecorded water/domestic1) Memorize the following from B.C. Water Act, R.S.B.C. 1996

a) S.1 definitions:i) Domestic purposes = for household use, sanitation, fire prevention, domestic animals

and poultry, and irrigating small gardensii) Groundwater = water below surface of groundiii) Stream includes natural watercourse or source of water supply, whether usually

containing water or not, ground water (but see s.3 below), and a lake, river, creek, spring, ravine, swamp and gulch

iv) Unrecorded water = water the right to use of which not held under license or under a special or private Act

b) S.2(1) – title and right to use and flow of all water in any stream in BC vested in government, except only in so far as private rights have been established under license or approvals given under this or a former Act

c) S.2(2) – no right to divert or use water may be acquired by prescription (prescription = manner of acquiring property as a result of use/enjoyment of land openly and peacefully for a prescribed period of time)

d) S.3 – a proclamation by LG in C may make this Act apply to groundwatere) S.42(2) – it is not an offence to divert unrecorded water (i.e. water for which no license has

been issued) for domestic purposesi) Note this latter part makes it lawful, but does not give right, to use unrecorded water.

Distinction of lawful = a shield (so I can’t be sued, can argue nuisance if someone else interferes with my use/enjoyment of my land and hence water in/on it, but do not have

entitlement) from a right (i.e. entitlement) = a sword (I can sue someone else for taking it away).

2) Have general gist of the rest:a) S.5 – licenses allow holder to divert water according to specified use, time, and quantity; to

store water; construct necessary works; alter/improve streamb) S.41 – person commits an offence if: hinders or interferes with license holder or their works;

puts sawdust, timber, tailings, gravel, refuse, etc. in stream after having been ordered not to; diverts water without authority, or more than authorized to, or that cannot use beneficially; makes changes in and about a stream without authorization. Fines are up to $200,000 per day or imprisonment not exceeding 12 months, or both

c) S.42(1) – not an offence to divert water to extinguish a fire (but must promptly restore)

Opinion 1) – riparian rights still exist except as against party with Water Act licenseJohnson v. Anderson (1937) (B.C.S.C.)1) Facts: defendants diverted water (had license, but not to divert) from stream which ran through

plaintiffs land (didn’t have license, used water for domestic and stock purposes i.e. lawful by Water Act s.42(2))

2) Claim: plaintiff claims his riparian right of flow has been violated3) Rule:

a) Interpreted Cook v. City of Vancouver (1912) (J.C.P.C.) to not say riparian right of flow taken away completely, but only against someone who had license to divert water.

b) Although the new Water Act did not have the provisions saving certain riparian rights present in previous Act, court held not intended that riparian rights have gone completely (surprisingly) i.e. court striving to preserve riparian rights in face of perhaps clear legislative intent to do away with them

c) Thus, common law riparian rights of use and flow still exist to protect against an unlawful diversion of the stream.

d) By s.42(2) of Water Act riparian owner can still use water until all water flowing by or through land has been granted by license

4) Decision: since defendants diversion is not lawful (no license to divert) they are infringing on plaintiff’s riparian rights

Opinion 2) – although judge said didn’t need to decide matter, riparian rights extinguishedSchillinger and Ponderosa Trout Farm v. H. Williamson Blacktop & Landscaping Ltd, (1977) (B.C.S.C.)1) Facts: plaintiff downstream

riparian owner using water for fish cultivation with license, defendant putting silt in river upstream, killing the fish

2) Claim: plaintiff suing defendant for nuisance (in nuisance it is usually a balancing act, and if plaintiff is acting illegally, little chance of being successful)

3) Decision: a) Plaintiff diverting water from different place than authorized by licenseb) Plaintiff not using water for domestic purposes, cannot rely on s.42(2) of the Water Act.

Plaintiff authorized to divert water from here

Plaintiff actually diverting water from here

Defendant silting water here

c) Can plaintiff rely on riparian rights (of extraordinary use of water in undiminished quality)? No, since riparian rights extinguished (although judge said didn’t need to decide this matter, but perhaps he did, hence semi-obiter)

Hence plaintiff using water illegally, nuisance claim dismissed.4) Note: could have considered the illegality of defendant in polluting and then balanced the two

parties i.e. perhaps no need to make strict “common law riparian rights gone” statement.

Opinion 2) – in B.C.S.C. judgement, obiter dictum = riparian rights extinguishedSteadman v. Erickson Gold Mining Corp. (1987) (B.C.S.C.)1) Facts: plaintiff was piping water to his house from spring-fed dug-out on his land, substantially

for domestic purposes (had small rock and gem business, and using small amount of water for this, but considered insignificant). Therefore lawful under s.42(2) of Water Act (allows diversion and such works as necessary for diversion – important to be lawful in balancing act of nuisance case). Defendant built road up hill, causing silt and mud to contaminate plaintiff’s water system. Plaintiff claims nuisance.

2) Decision: case actually about percolating water (see C.A. below) but at trial, in referring to Johnson v. Anderson (1937) (B.C.S.C.) said that decision was wrong i.e. in obiter dictum, said s.2 takes away riparian rights. At appeal, little comment on this matter

Conflicting opinions in BC – must discuss both in any case, but 2) probably more persuasive1) Johnson = riparian rights remain for water in defined channel, except as against lawful holder

of license (i.e. recorded right)2) Schillinger says (in semi-obiter) and Steadman (trial) says (in obiter) riparian rights have gone3) So in any such case, would need to discuss both of these opinions, although opinion 2) seems

the more likely to succeed4) Note all BC courts – there has been no S.C.C. decision on this matter5) Whether or not riparian rights still exist, a landowner could still sue for nuisance (i.e.

diminished use and enjoyment of land) if they were using water but then interfered with (although note would want to show use of water lawful, compare with Schillinger)

Percolating water can be extracted by landowner for any purpose (including wasting it)Mayor, Alderman, etc. of Bradford v. Pickles (1895) (English H.L)1) Facts: defendant owns higher land, water collects underground and due to fault lines percolates

down to lower land owned by plaintiff, where water is collected and supplied to town of Bradford. Defendant sank shaft and tunnel through fault to drain land, but with water going in different direction than to plaintiffs land (plaintiff suggested purpose purely to extract cash from city, i.e. improper/malicious – compare with metal finger in A.G. of Manitoba v. Campbell (Man. Q.B.) (1983)). Resulted in discolouration and diminished flow for plaintiff. In addition, statute Act of 1854 where town of Bradford took over the old waterworks company and its land, was said by plaintiff to disallow defendant’s extraction of water.

2) Decision:a) if you have a right to something, your motive is irrelevant e.g. you can squander it.b) Quoting Chasemore v. Richards, landowner can extract percolating water for any purpose,

with no regard for others i.e. no one has right receive percolating water. Compare with wild gas in Hammonds v. Central Kentucky Natural Gas Co. (1934) (Kentucky C.A.).

c) Would have been different decision if it had been an underground stream, since then riparian rights would have (at least at this time in England) applied, ordinary use and extraordinary use (certainly could not just waste it)

d) Finally, partly because it contained no compensation, the Act of 1854 was interpreted to only protect the taking or diverting of water already under the dominion of the plaintiff (i.e. on their land), not as giving right to plaintiff against people stopping it reaching them

3) Note: Penno v. Manitoba and Pugliese v. National Capital cast considerable doubt upon applicability of this case in Canada today – in the latter, the court said there is no absolute right to percolating water, and instead had to be balanced against (again non-absolute) right to support.. Also modern legislation probably overrides this case as well.

1989: groundwater not yet in Water Act, nuisance to pollute ground or watercourse waterSteadman v. Erickson Gold Mining Corp. (1989) (B.C.C.A.)1) Facts: see trial above2) Decision:

a) The Water Act does not yet apply to groundwater, either stream or percolating: even though s.2(1) says stream which by s.1 includes ground water, because of s.3 and since no proclamation had (at least by this time) been made. So common law rules apply:i) riparian rights apply to underground stream (use and flow in quantity and quality)ii) percolating water common property, and anyone can appropriate as much as they likeBut either way it would be nuisance to pollute groundwater to detriment of neighbour, even though that neighbour had no proprietary right in water at time of pollution (compare with polluted air from neighbour)

b) But is water here groundwater? I.e. when does percolating water taken from well or spring become a watercourse? Court couldn’t say, so also considered case as if watercourse:i) If watercourse, plaintiff’s use is lawful by s.42(2) of unrecorded water (which may all

become recorded one day) hence right to such water in usable state against another who does not have authority to pollute it.

c) So nuisance either way.

1995: Water Protection Act vests all groundwater in government, hence Water Act applies1) S.3(2) gives title and right to use of “percolation and any flow of groundwater” to government2) So Water Act now applies to both underground streams and percolating water, but note s.42(2)

still allows domestic use of unrecorded groundwater.

Ownership of bed of water areas

Foreshore, tidal or navigable Prov, non-tidal & non-navigable ad medium applied in the past1) Foreshore = tide washes across it, between low water line and mean high water line (i.e. does

not include land covered only by high-spring or extraordinary tides), owned by provincial crown (any land that goes down to mean high water line is riparian). Justification is that this land is not “manurable” i.e. no good for agriculture.

2) Sea bed = constitutional issue between federal and provincial3) River/stream bed:

a) If tidal, treated in same way as foreshore, bed owned by provincial crownb) If not tidal:

i) If navigable (like a “highway”): bed vested in provincial crown (at least in western provinces and Ontario)

ii) If non-navigable:(1) If old certificate of title, rebuttable rule of ad medium filum aquae applies (i.e.

riparian land owners on either side own their half of stream bed out to centre of stream, unless otherwise stated / intended with knowledge on both sides)

(2) If newer certificate of title, by s.55 and s.56 of Land Act, ad medium rule does not apply

1886: ad medium applies, even if bed not coloured or area included, unless known intentionMickelthwaite v. Newlay Bridge Co. (1886) (English C.A.)1) Facts: predecessor to plaintiff, who owned land on both sides of river, sold land on one side,

described as “bounded on north by the river”, but map colouring used to identify land did not colour in the adjacent stream bed out to centre, and did not include the area of the stream bed (sold land was described as 7,752 yds2, but with river bed out to centre would have been 10,031 yds2). Defendant, subsequent owner of that land, now wants to build a bridge across the disputed part of stream bed (plaintiff has toll bridge nearby, new bridge would be free).

2) Issue: should ad medium rule apply – was never explicitly addressed in conveyance3) Decision: ad medium applies because:

a) Ad medium is a rule of construction (i.e. to be presumed to assist court in interpretation, as opposed to a common law rule, which would obviously apply unless expressly contracted away)

b) When land sale is to border of river or public highway, ad medium rule applies even though neither colouring on map nor area includes it. But is rebutted if:i) Express statement in conveyance saying otherwise, orii) Circumstances, known to both parties, exist at time of conveyance, that show intention

by vendor to make use of that part of stream bed4) Policy reason: the half of the stream bed closest to you can be most usefully used by you

Even Torrens system ad medium still applies to “bounded” by non-tidal/non-navigable streamCanadian Exploration Ltd. v. Rotter (1960) (S.C.C.)1) See Torrens system under Land Law below2) Facts: appellant and respondent landowners on opposite sides of river. Appellant removed large

quantities of sand and gravel from riverbed, both on its adjoining side of river and on opposite side.a) Certainly respondent owned their half of river (so no damages due for material removed

from here)b) But had previous land sale resulted in appellant owning their half – only so if ad medium

rules appliesi) If so, no damages for this sideii) If not so, this side also belongs to respondent, so more damages

3) Issue: Do the provisions of the Land Registry Act manifest an intention to exclude the ad medium rule in respect of certificates of indefeasible title in BC?

4) Decision (B.C.S.C. and S.C.C. majority): no – ad medium does still apply under BC Torrens system when land described as bounded by a non-tidal and non-navigable stream, because:a) Although legislation can take ad medium rule away (e.g. Dominion Lands Act), not so with

Torrens system because:b) Practical difficulties in surveying, as required for conveyance, the middle of streams whose

flow varies throughout year i.e. great difficulty putting stakes down centre of watercoursesc) Principle of ad medium (whether construction rule or common law) is too deeply embedded

to be disturbed or doubtedd) Clear intention in this case that half of stream bed should be transferred

5) Dissent (and B.C.C.A.): said the object of the Torrens system is to save people from having to “go behind” the register i.e. look into the past and figure out what went on, but the majority

decision here would make such searches necessary with land bounded by non-tidal and non-navigable streams to figure out who the half-stream bed belongs to.

Land Act, S.B.C. 1961 following Rotter phases out ad medium rule1) Following Canadian Exploration Ltd. v. Rotter, legislation passed to phase out ad medium rule:2) S.55(1): no part of bed or shore is deemed to have passed to person acquiring grant unless red

colour used on map, or express provision to contrary, or minister otherwise directs3) S.56(2): this does not affect any claim decided by court before 1961 (so Rotter ok), or someone

with indefeasible title issued before 1961 that specifically includes bed (whether or not red used)

4) Note: since new title certificates are issued every time land is sold, s.56(2) will gradually bring all titles under s.55(1) i.e. together, these section will gradually reverse Rotter decision

Does ad medium rule apply to Indian reserves – probably, but not decided since navigableR. v. Lewis (1996) (S.C.C.)1) Issue: do the Squamish nation own half-bed of adjoining Squamish River?2) Decision: ad medium does not apply to navigable rivers, although perhaps assumed that if it was

not navigable, then rule would apply

Access, Navigation

Riparian rights include access, right to cross foreshore, mooring, not construct on foreshoreDistrict of North Saanich v. Murray (1975) (B.C.C.A.)1) Issue: does a riparian owner (adjoining sea) have right to construct structures (e.g. wharves) on

foreshore2) Rule: Quoted basic law from book:

a) Riparian rights include right of access to/from water for the private owner (not for public), regardless of who owns bed – this is wholly distinct from right to navigation

b) Access includes right to moor a vessel adjacent to land for period necessary to load/unloadc) This access and mooring rights must not be used in a way to interfere with other riparian

owners access rights or public navigation rightsd) With tidal waters, riparian owner (i.e. to mean high water mark) has right to cross foreshore

(owned by Crown), but not to construct on foreshore (without grant from province). If a pier or causeway already exists, riparian owner has right to use it (perhaps for a fee)

Navigable rights if in natural state useful as public highway: commerce/predictabilityWelsh v. Marantette (1983) (Ont)1) Issue: have riparian right of access & to moor boat, but as float away the riparian right ends and,

if it exists, the public right of navigation takes over. Of course, owner of bed of waterway has right of navigation.

2) Facts: defendants owned a widened channel (used to be a ditch) leading off a creek (no ad medium here). Plaintiffs land adjoined the channel.

3) Claims: Plaintiffs claimed right of navigation down the channel to reach the creek by boat (also right of support – see below)

4) Decision: The old ditch, before widening, was a watercourse because it was a distinct channel with visible banks/margins (note how current, artificial waterway does not carry rights itself – rather looking at original natural waterway). Hence, riparian rights exist for widened channel (e.g. plaintiff has right of access, which they currently enjoy). But there are only navigability rights if it has characteristics of a highway:

a) Capable of use in its natural state by public for purpose of transportation/commerce between terminal points that public has access to (so does not include every small watercourse that a little boat could go up, or a private boat harbour).

b) Need not be navigable continuously, but fluctuations (e.g. freeze up) must be regular and predictable so dependable so can work commerce around it (and blockages, such as rapids, that boats can be carried around, ok)

In this case, the ditch (i.e. channel in its natural state) was not navigable in this sense, so no public right of navigation (it’s like a boat harbour created on defendant’s private land).

Support

Right of support (lateral and subjacent) of land in its natural state (i.e. without additions)1) Right of support a natural right (ex jure naturae) attached to ownership of land in its natural

state (i.e. does not include additions e.g. buildings). Only applies to neighbouring land. Frequently linked with nuisance, negligence, and trespass. Two aspects:a) Horizontal/Lateral support. If house falls over, question is whether land would have

subsided on its own without additional weight of house. If so, then get damages for loss of support of land and consequential loss of house (contrast: house is part of land in fixtures, not considered part of natural land here). If not, no right of support claim here, but might still claim nuisance.

b) Vertical/Subjacent support e.g. neighbour burrows under your land i.e. may be trespass, or may have given easement for mining (but not properly shored up). Strictly should ask same question if house falls – would land have subsided in its natural state without additional weight, but often assume this because it’s a loss of vertical support and gravity takes over.

2) Note can buy an easement for support of buildings from neighbours

Support includes indirect i.e. not to facilitate wind/rain by excavations on adjoining landCleland v. Berberick (1915) (Ont H.C.)1) Facts: plaintiff, defendant and defendant’s wife owners in that order alongside lake. Defendant

and wife each removed sand from their lots.2) Claims:

a) Plaintiff claims that as a result of sand removal, action of wind and water has been greatly facilitated, resulting in washing away large part of plaintiffs sandy beach.

b) Defendant claims his wife’s removal of sand was the cause (she doesn’t adjoin plaintiffs land, so no right of support there).

3) Decision: found for the plaintiff that adjoining sand excavations were primary cause (even though indirect by storms) of plaintiffs land collapsing, since right of support is that someone’s land should be left in its natural state without interference by direct or indirect action of nature facilitated by direct action of adjoining land owner

But if wind naturally blows sand off land (and neighbor then prevents its return) no actionBremner v. Bleakley (1924) (Ont.App.Div.)1) Facts: defendant excavates holes on land, sand from neighbouring plaintiffs land blown around,

and that which falls in holes does not have chance to return (so defendant can effectively collect and sell plaintiffs sand).

2) Claim: closest cause of action was loss of support, so plaintiff claimed that.3) Decision: Right of support protects from actions by neighbour that cause subsidence – the

digging of the holes here (which was lawful) did not cause the sand to blow off plaintiffs land, rather only not to return – thus not strong enough chain of causation. Plaintiffs have no property

in the sand after it has blown off their land – rather, things naturally deposited on defendants land become incorporated with it e.g. accretion (if sand remained plaintiffs property, like a chattel, plaintiff could claim conversion when defendant sells it, but on the other hand defendant could compel its removal – no precedent found for this argument). Perhaps claim of nuisance would have been more successful due to loss of enjoyment of land (i.e. beach) since focus would not be on cause of loss of sand, but rather cause of loss of enjoyment.

Lateral support only for natural land not weight of buildings, but was liable for verticalGillies v. Bortolullzi (1953) (Man. Q.B.)1) Facts: Typical loss of support case: plaintiff leased building, on neighbouring land defendant

(contractor) excavating. Plaintiffs wall falls down, and claims loss of support (and additionally trespass (undercut), negligence and nuisance. Note could argue the neighbouring land owner should be responsible since gave permission to contractor to excavate, and also that subsequent owner buying land with a support wall to support neighbours building might also be responsible for its upkeep.

2) Decision: Loss of lateral support due to excavation did not remove support for plaintiffs natural land but only for weight of building – hence no action. But defendant did dig underneath plaintiffs land, removing subjacent support, hence liable (and in separate cause of action, also for negligence, nuisance, and trespass)

Not entitled to lateral support for increased pressure by building, but generally with verticalRytter v. Schmitz (1974) (B.C.S.C.)1) Facts: Part of plaintiffs building collapsed after defendant (neighbouring land owner) got

contractors to excavate.2) Historically: law of prescription = a right to lateral support easement (i.e. an incorporeal

hereditament) of buildings was gained after 20 years if uninterrupted, without concealment or deception, and peaceable, and known. These prescriptive rights have been cancelled as of 1976 under our land registry system because of “mirror” idea in Torrens, but pre-existing prescriptive rights could be registered / brought as action before that date, as is the case here (similar to a tort case, Cooper v. Crabtree, of prescriptive right to light flowing across neighbours land after 20 years, unless neighbour puts up board once every 20 years)

3) Decision: here, no right to lateral support of increased pressure due to building, but defendant undercut plaintiff’s building removing vertical support (assuming here that generally subjacent support for both land and building – shortcut way of saying land would fall on its own account and take building with it), hence liable. Noted right to support is strict, so no need to show intent, negligence or trespass

“Fill” on land is not natural part of land, so no right of lateral support for itWelsh v. Marantette (1983) (Ont)1) Facts: defendants owned a widened channel (used to be a ditch) leading off a creek (no ad

medium here). Plaintiffs land adjoined the channel.2) Claims: Plaintiffs claimed defendants liable for erosion to plaintiffs land due to widened

channel, caused by wake of boats, fluctuations in water level, ice grip, etc. i.e. right of lateral support was taken away by dredging of channel (also claimed navigation right – see above)

3) Decision: there is a natural right of lateral support incidental to land ownership, but does not apply to additions or erections (unless by grant, etc). Claim dismissed in this case, since plaintiffs land had been covered with fill, and it was this additional soil that was being eroded, not the original, natural land

4) Comment: when does fill become natural (i.e. historically civilizations build on top of old one, so fill becomes natural at some time). In US, suggestion of time period, others ask when is there an integration of the layers. No answer in Canada.

No absolute right to support by or extract percolating water – negligence & nuisance availablePugliese v. National Capital Commission (1977) (Ont. C.A.)1) Facts: plaintiffs claim they suffered subsidence of their homes and lands due to lowering of

ground water table by defendant who was building a sewer and “dewatered” to allow tunnelling i.e. pumped out water from deep drainage wells

2) Claims:a) Negligence: plaintiff claims defendant should have: better investigated subsurface

conditions, selected more appropriate method of water control for tunnelling (e.g. use of compressed air rather than dewatering), more closely monitored affects, and terminated when informed of problems.

b) Nuisance: interfered with use and enjoyment of plaintiff’s landc) Breach of statutory duty: plaintiff bringing civil action for defendants statutory breach since

pumping out more water than allowed under Ontario Water Resources Act.3) Issue: How choose/balance between the right to extract percolating water v. right of support (i.e.

support here due to percolating water pressure in ground beneath land)4) English rules: Acton v. Blundell (1843) gave absolute right to land owner to extract percolating

water, and whatever the motive as in Bradford v. Pickles. So no action in support if removal of percolating water causes subsidence under neighbours land, but there is action in support if not just water but e.g. running silt (i.e. wet sand), brine (i.e. salt water, by making the solid liquefy). As to nuisance and negligence, Langbrook v. Surrey (1969) in similar case as here said no negligence due to absolute right to percolating water, even for malicious reasons (i.e. if can do harm on purpose, can hardly be held liable when do it carelessly), and no nuisance.

5) American rules: Some States still follow absolute right to percolating water, sometimes with the limit that cannot extract for sole purpose to injure neighbour or to waste it. Others (not as wet as England) have implemented the reasonable use doctrine i.e. can extract amount necessary for useful purposes connected to land. Others have extended this to the correlative rights doctrine i.e. apportions underground water where not enough for all reasonable uses. Neither have been adopted in Canada. Some US courts have allowed negligence actions when user could have reasonably avoided harm to neighbours wells or water supply, and for subsidence even when abstracting pure percolating water when simple precautions (e.g. observation wells) could have been used, and hence nuisance action as well.

6) Australian rules: both negligence and nuisance have been allowed in this type of case.7) Ruling: Remember Water Protection Act applies to percolating water now, so have to read

common law in conjunction with that. No previous Canadian case in point (and English cases don’t necessarily apply since after date of reception of law in Ontario 1792, although normally more important with statutes than with common law).a) There is no absolute right to support by percolating water (so no automatic right to

damages), but does have a right not to be subjected to interference with such support that amounts to negligence or nuisance (i.e. Interference with right to support by percolating water can give rise to cause of action in both negligence and nuisance).

b) Similarly no absolute right to extract percolating water.c) Negligence: defendants should reasonably consider plaintiffs when pumping out water,

physical proximity gave rise to foreseeable risk of harm, hence duty of care here, and focus

upon conduct of defendant, applying reasonable person test to determine if proper standard of care was taken (new trial ordered to determine such questions)

d) Nuisance: note negligence not prerequisite for action for nuisance i.e. can be doing something reasonable and legal, but still a nuisance (private nuisance = interference, for substantial length of time, by owners/occupiers of one property with the use of enjoyment of a neighbouring property). Must ask not if defendant used their land reasonably, but whether it was reasonable considering that they had a neighbour. A balance between owner and neighbour must be struck. Taking of all reasonable care not a defence, since there might be some actions that no matter how carefully undertaken constitute a nuisance.

e) Breach of statutory duty: (Note: this tort action restricted by later case Saskatchewan Wheat Pool Case (1982) (S.C.C.)). To decide if public has civil right of action after statutory breach, consider:i) Was object of breached statutory provision to prevent damage of the nature that

occurred? (Here no, Water Resources Act not concerned with protecting against subsidence)

ii) Was provision intended to create a public duty only, or in addition an enforceable duty to individuals harmed? (No, since not protecting individuals against subsidence, but rather protecting public as a whole)

iii) Were statutory punishments intended to be the only remedies available? (Yes)iv) Would contemplated beneficiaries of provision be without an effective remedy

otherwise? (No, have other remedies of negligence and nuisance available).Hence no civil remedy for breach of statutory duty in this case.

Accretion

Accretion = gradual and imperceptible growth (or erosion) of land, or receding water1) Accretion is growth of land at border with water, either by build up of bank by deposits carried

in water and dropped so they attach to the adjoining land, or by previously submerged land exposed by receding water. Similarly with loss of land through erosion or diluvion i.e. advancing water.

2) In tidal cases, when land becomes dry land, no longer foreshore that belongs to Crown (i.e. between low and mean high water marks), rather becomes part of riparian owners land. Some think of this as a natural right or land like riparian rights and right of support, others think of it as a rule of convenience.

3) Justification: considered to be fair since landowner will have additions (accretion or receding water) and losses (erosion or advancing water), and convenient to regard boundary as between land and water as it changes over the years. Also, unlike foreshore, this land is now “manurable” i.e. useful for agriculture, so makes sense to pass it to private hands for use. De minimus principle (law doesn’t concern itself with trifles) not really relevant since can be considerable land area over years.

4) Must be:a) gradual andb) imperceptible in progress (although not in result i.e. can see consequences over time) andc) by natural causes or as a result of human activities not intended to grow / lose land

5) As opposed to avulsions i.e. sudden and perceptible loss or addition to land e.g. significant shift in stream after flood or earthquake, in which case boundaries remain the same – note virtually no case law on this since normally government intervenes in such circumstances

Time accretion begins relevant, can’t be foreshore, policy issues (e.g. “manurable”) irrelevantA.G. B.C. v. Neilson (1956) (S.C.C.)1) Facts: Respondent owner of island, and in 1930 Crown built highway along edge of island in the

Fraser River (title of all highways is in the Crown). Through accretion the island enlarged beside highway.

2) Issue: did accretion begin before 1930 (in which case it and subsequent accretions would belong to respondent) or after 1930 (in which case accretion has joined to the highway and hence belongs to Crown)

3) Rule:a) Accreted land cannot be foreshore, since foreshore is washed over by tides, whereas

accreted land is “dry” land above mean high water levelb) Doctrine of accretion applies to tidal and non-tidal, and navigable and non-navigable rivers.c) Policy issues of whether land is now “manurable” / useful are irrelevant in determining if it

is accreted land4) Decision: most judges found that the land in question at the time was still overflowed by river

waters i.e. was foreshore prior to building of road, and hence land in question now belongs to the Crown.

Accreted land must go out, not come up – deposits should attach to adjoining land, not bedRe Bulman (1966) (B.C.S.C.)1) Facts: dispute over ownership of land at junction of North Thomson river and Kamloops lake,

where river drops much deposits as enters relatively dormant body of water in lake, forming sand bars/banks through vertical development.

2) Rule:a) Policy issue irrelevant – fact that land is now “manurable” irrelevant in deciding if land is

accreted – it is the gradual and imperceptible test that must be usedb) Accreted land must come about by land projecting outwards horizontally (deposits must

attach to adjoining land), not through vertical development (i.e. not deposits attaching to bed). In this case it is to bed, hence the owner of the bed gets the land.

Accretion includes windblown sand, imperceptible = can’t see consolidation / stable advanceSouthern Centre of Theosophy v. South Australia (1981) (Privy Co.)1) Facts: Appellant owner (perpetual lease) of land beside lake, and claims accreted lands which

have been built up in the north by water deposits / water receding, and in south also by windblown particles (i.e. sand dunes reaching outwards)

2) Rule:a) First, the doctrine of accretion applies to (this is privy council, so doesn’t bind Canada of

course):i) Inland lakes (i.e. non-tidal sheet of more or less stagnant water) andii) Allodial land i.e. held by Crown directly as land rather than as an estate from a superior

lord (i.e. not as fee simple)b) Principle of accretion can be excluded (i.e. agreement by parties that border will remain

fixed so accreted land goes to other party than usual) but requires (like with ad medium rule) explicit terms in documents, since presumption that principle applies is strong i.e. just colouring on maps or delineation (i.e. drawing outline) is not enough (taken to mean a water boundary)

c) Extended principle of accretion to include land growth due to windblown sand at a land/water boundary (common law can be adjusted / expanded by analogy) – did not decide

if this would apply to land/land boundary (e.g. where boundary described as “the edge of the sand dunes”)

d) There is a “grey area” between imperceptible and what should be considered avulsion, hence usually left to the jury. Can see sand moving blowing about here and in high winds can see build up, but imperceptible if can’t see a consolidation taking place bringing about a stable advance of the land

Upland border of Crown “strip” is not mobile “snake” unless explicitly described as suchRe Monashee Enterprises & Minister of Recreation & Concervation B.C. (1981) (B.C.C.A.)1) Facts: A strip of land one chain wide immediately above the mean high water mark was

reserved by Crown, with private ownership above that – so Crown is riparian owner (to preserve right of access for public or perhaps build highway). Accretion to foreshore then occurred.a) Issue: not riparian land, rather inland border, so not really about accretion. However, does

inland border move as accretion / erosion occurs and hence as MHWM moves?2) Decision:

a) Not persuaded by practical Crown arguments (i.e. strip to build road on, or erosion might obliterate strip completely) because Crown can prevent erosion at foreshore or expropriate upland property.

b) Rather, if private owner upland builds near property line with strip, then by erosion property line moves up, so Crown now owns land under house, and house owner could not have prevented the erosion as the Crown could.

c) Certainly explicit words in grant could create an ambulatory strip, taking away from land previously granted as upland border moves in, but not so here (although did say “one chain up from mean high water mark”).

d) Hence upland boundary of strip is not mobile unless grant explicitly describes it as such.

Tenures (pyramid), estates (legal title), trusts (equitable holding for another’s benefit)

Tenures = pyramid of relationships, King-tenants in chief-mesne-demesne (now unimportant)1) Tenures part of feudal system, 1066, William the Conqueror created social pecking order by

taking over all land in England and then giving out to supporters of his conquest of the Anglo-Saxons (including some Anglo-Saxons). Roughly speaking, the kind of tenure specified the obligations that such land holders had to give to their lord, whereas the type of estate specified how long the holding would last.

2) Tenures ceased to have practical significance around 1660 (Abolition of Tenures Act)3) Tenures not quantitative (like estates which specify time period of occupation) but qualitative

relationships (i.e. related to social/political/status/wealth set up)4) Pyramid of land grants:

a) Freemen hold freehold under different types of tenures and estates:i) King – allodial owner i.e. absolute ownership as opposed to holding from a lord

(similarly today the Crown only allodial owner, with everyone else holding an estate in land)

ii) Tenants in Chief – normally Barons, top aristocrats, hold land from the King under loyalty, fealty (oath to be faithful) and homage (acknowledgement King is his Lord), with protection coming down

iii) Mesne – (pronounced “main”) lords subdivide land and grant to other lords belowiv) Demesne – lords at bottom who hold land to occupy for themselves. The King, Tenants

in Chief and Mesne lords would all hold some demesne land for themselves (called Royal demesne in case of King)

b) Unfree men gained copyhold tenure (not really part of pyramid, rather underneath it)i) Villeins – i.e. surfs, entitled to hold small patches land, according to particular

customs/rules of the particular manor (i.e. land of a Tenant in Chief) at a particular time. Copyhold continued in England till 1926 (when converted to freehold socage) but never existed elsewhere.

5) Types of tenures reflected status and involved different services to overlord (conditions became obligations/advantages connected to the land itself, so passed with it)a) Knight service (Tenants in Chief normally held this most prestigious type) – initially had to

provide knights to overlord (militia type of system), by C12th provided money (called scutage) to allow King to build professional army, and politically holders of this tenure type sat on governing body under King – converted to socage in 1660

b) Serjeanty – personal service (grand serjeanty providing services at Royal events, sports, military campaigns – fell into disuse except minor e.g. coronations, petty serjeanty less prestigious services – converted to socage in 1660)

c) Frankalmoin – spiritual/ecclesiastical service to overlord – fell into disused) Socage – agricultural obligation (lords also had villains to provide food). This is the type

that still exists, in theory, today6) Freehold tenure had to be certain i.e. services had to be known since freemen involved and so

could not demand of them at will – minor exception was some incidents (i.e. additional obligations to services) such as aids = must come to aid of superior lord in emergency (e.g. provide money if held hostage). Other incidents: escheat, forfeiture (e.g. King took land if committed treason), payment to superior lord on marriage.

7) Statute Quia Emptores 1290 – concerned purchases (still law today) creating basis for free alienation and replaced subinfeudation with substitution i.e. seller drops out of pyramid, replaced by buyer (except for Tenants in chief who lost subinfeudation in 1327, but still had to pay fine to Crown until 1660)

8) Over time, pyramid flattened with more tenures held directly from King. Thus incidents provided King much money, allowing maintenance of Stuarts reign independent of parliament – incidents of tenure abolished (except escheat and forfeiture) in 1660 for this reason

9) North America – tenures only came over in very theoretical way e.g. land for Hudson’s Bay Company required them to provide a little food for Royal visits

Estates: “unGodly jumble” but flexible: fee simple/tail, life, reversion, remainder, autre vie1) Estate = legal right to possess and occupy land for a certain time, but separate from the land

itself (unlike tenures where obligations passed with land)2) Quantitative (not qualitative like tenures): title to land for period of time after which it passes to

next successive estate owner, or if none, escheats back to Crown (B.C. Escheats Act), so technically no one (except Crown) owns the land directly (i.e. allodial ownership), rather only own an interest (i.e. an estate) in the land, and inherently uncertain such as for life (unlike freehold tenures which were certain).

3) 4 different types of freehold estates that developed within the feudal system (as opposed to leasehold estates):a) Fee simple: fee = inheritable, simple = without qualification. “To A and his heirs” (“to A” =

words of purchase i.e. who gets it, “and his heirs”= words of limitation i.e. what type of estate given – does not actually confer anything to A’s heirs, so note importance of distinguishing words of purchase from words of limitation). By Quia Emptores have right of free alienation. Hold as long as have heirs (descendants, ascendants e.g. parents, or collaterals e.g. brothers, nieces) and can leave to anyone in will. Thus can theoretically hold

forever i.e. closest approximation to absolute ownership, but if die intestate and no heirs (according to intestacy statutes today) escheats to Crown and estate ends (superior lord historically)

b) Fee tail: (abolished in B.C. in 1921, similarly elsewhere): “To A and the heirs of his body” i.e. words of limitation restricts grants to lineal descendants (children, grandchildren, etc.) keeping it within the family i.e. dynastic aspirations. Further limits would be estate in tail male/female limiting to male/female descendants. Note can’t give what you have not got (nemo dat principle), so if only have a fee tail, cannot give a fee simple

c) Life estate: “To B” (historically), “To B for life” (today), estate for time of B’s life (the early Norman tenures were probably life estates, only lasting during the life of the lord and tenant):i) E.g. A has fee simple, grants “to B for life”, then A the grantor, has a reversion (a future

interest) = the part of a grantors estate/interest not disposed of by the grant – when B dies possession reverts back to A (if A dead, then according to A’s will, or to heirs, or if none then to Crown). A called the reversioner.

ii) E.g. A grants to B for life, and to C in fee simple thereafter e.g. in A’s will A wants to go to child B and then to B’s children C (so note grantor can create a number of estates in succession, and thus can “control from the grave”). C called the remainderman. So C must wait for B’s death to take possession, and B could sell autre vie (see below) – would not affect C since B is still the measuring life. A has no reversion here, C has a remainder (a future interest) = the estate created when a grantor, who, having granted away part of an estate, by the same instrument (or at least at the same time) grants to another an estate in the same land limited to begin when the first grant comes to an end.

iii) Note this can cause difficulties for B e.g. what if B doesn’t want to live on the granted land and would rather sell it. So often better for A to grant to B in fee simple and let B take care of C, or else A could transfer land to a trustee (see below) for benefit of B, and trustee could be given wide powers to lease, sell, etc. during B’s life, and to then grant to C on B’s death

iv) Note different situation if A first grants to B for life, and then later grants subsequently to C in fee simple. First grant automatically created a reversion since something left un-disposed of, then second assigns the reversion to C, thus no remainder created.

v) Can also impose a contingency = not vested till contingency met, and automatically creates a reversion on failed contingency. E.g. A (holds fee simple) grants to B for life then to C in fee simple at 21 years of age. If C dies at 19, reverts to A on B’s death. Thus future interest = a present right by virtue of which possession will (i.e. if no contingency or contingency met) or may (i.e. with contingency) be obtained in the future.

d) Autre vie = life of another – “To B for the life of A” e.g. A has a life estate and assigns/sells to B, obviously has to be done inter vivos i.e. between living people (since estate ends when A dies and goes back to original grantor). If B dies, can leave it in will to B1.

4) Leasehold estate: originally a tenant could not recover possession if evicted by a third party (although they could against the landlord), and so fell far short of an interest in land, and hence considered personalty rather than realty. But over time, protection against dispossession strengthened and became to be treated as a freehold interest, hence the name “chattel real”. Duration of lease set at time of creation

Equity – “use” on the “use” became modern trusts (holding title for use/benefit of another)1) All of the above on tenures and estates was at law (as opposed to equity). Here the development

of trusts is outlines. Modern trusts can be used by a donor/grantor to give legal title to one

person (the trustee), while giving “equitable title” i.e. use/benefit to another (the cestui que use, i.e. beneficiary)

2) History:a) Up till 1870’s two separate systems of courts:

i) Common law (exchequer for financial matters, common pleas for land matters, King’s Bench for contract, torts, criminal matters)

ii) Equity (petitions to King due to inadequacy of common law, passed on to Lord Chancellor, passed on to clerks of Chancery) – well established by C15th

b) Chancery/Equity did not try to overturn the common law, rather devised a set of rules to parallel it i.e. equity changed the result without changing the law

c) In 1870’s two systems started coming together: legislation allowed judges of one system to apply rules of the other

3) “Use” (stage 1): up to 1535a) Feoffment: “A to B in fee simple” (“and his heirs” in historical language) “for the use of C

in fee simple” (“and his heirs”). A = feoffor, B = feoffee, C = cestui que use.b) Common law courts would only consider first part of this, so B is the legal title holder (by

substitution from A, allowed under Quia Emptores 1290)c) C would have to go to chancery/equity to enforce this – legal position of common law would

not be changed, but if B refused to allow use for C, chancery would act in personum (i.e. against the person) with possibility of prison for B. So note how equity changing the result but not the law.

d) Thus “use” created where holder of legal title was compelled by Lord Chancellor to hold the interest not for their own benefit, but for the benefit of another. Well established by early 1500’s.

e) Purpose of the “use”: to avoid incidents of tenure by giving legal title to B instead of C e.g. aids = uncertain aid to overlord in emergencies, forfeiture of land to the King (i.e. choose a B who is less likely to be accused of high treason than C), wardship and marriage e.g. if left estate to minor heir (i.e. C under age of majority) then superior lord could take all profits from the estate – thus if heading off to Crusades, better for A to give land to B for the use of A’s minor heir

f) Another purpose was that Statutes of mort main (around 1272) had disallowed passing of land to “dead bodies” i.e. corporations such as ecclesiastical orders outside of commerce. To get around this could give a “use” to the order instead.

4) “Use” (stage 2): 1535 Statute of Usesa) King had been getting much income from tenure incidents but the “use” was restricting this.

Hence Statute of Uses changed situation by executing the use i.e. changed from B (legal title holder) / C (beneficiary) to B (eliminated) / C (legal title holder) i.e. gave the fee simple to the cestui que use

b) Now “uses” had been removed, needed some other mechanism to leave land to heirs. Prior to Statute of Wills 1540 could not leave land by will, but could do so by “use” instead i.e. “A to B for use of A for A’s life then for use of C”.

5) “Use” (stage 3): finding loopholes in the Statute of Usesa) Loopholes by the exact words of the statute

i) Statute said anyone “seized” (i.e. seisin is the possession of a freeholder) to the use of another would invoke execution of the use. So if instead of giving freehold to B for use of C, instead give leasehold to B i.e. “A to B for 99 years for use of C for 99 years” then avoid the statute

ii) Statute said B a person, so “A to B (a corporation) for use of C” would avoid statute

iii) Statute interpreted to only apply if feoffee B passive, so if gave B duties such as maintenance could avoid statute

b) The big loophole to “exhaust” the statute was to create 2 uses i.e. double use. “A to B in fee simple to the use of D in fee simple to the use of C in fee simple”. Initially didn’t work (Jane Tyrrell case in 1557) but later it did (Sambach case in 1635) reflecting political changes of the times. So after 1635 statute would apply and execute the first use (so D becomes legal title holder) but interpreted not to apply to second use.

6) “Use” (stage 4): emergence of modern trusta) Shortcuts – words that gave rise to a double use became truncated:

i) “A to B in fee simple to the use of B in fee simple to the use of C in fee simple”, so statute executes first use (B given title, which already had), thus avoiding D the 4th person

ii) “A [unto and] to the use of B in fee simple in trust for C in fee simple”, B = trustee, C = beneficiary (i.e. cestui que trust). Note “use” and “trust” are interchangeable

iii) “A to B in fee simple in trust for C in fee simple” – note this flirts with the statute of uses since now do not expressly create 2 uses/trusts (only a concern where the statute of uses still applies – abolished in England in 1926, but still applies here and is in the R.S.B.C. as an appendix). To be strictly correct should have 2 uses/trusts words, but courts likely to interpret “trust” to mean double use, and they look for 3 things to create a trust:(1) certainty of intention to create a trust(2) certainty in regards to the subject matter(3) certainty as to who the beneficiaries are

7) If innocent purchaser and innocent beneficiary, purchaser wins out: suppose trustee (who has the legal title) sells to purchaser without telling them about the trust and beneficiary? Nemo dat, quod non habet = “you can’t give what you haven’t got” but trustee does have the legal title so can sell it, and common law doesn’t care about uses/trusts. Thus equity developed doctrine of notice: beneficiary protected (i.e. purchaser given legal title subject to trust) unless bona fide purchaser, for value (i.e. not “volunteer” given land as a gift), and without notice (i.e. purchaser didn’t have actual notice or constructive notice i.e. should have known about beneficiary through inquiries) in which case the purchaser gets title without trust (tough luck for beneficiary – two innocents here so one has to lose). Of course, if trustee is around can sue for full restitution, but often left country or bankrupt.

Trust used to create flexible estate-like succession for personalty (splits legal title from use)Re Swan (1913) (English Ch. D.)1) Estates provide much flexibility for land, but is this possible with personalty? E.g. pen from A

to B for life then to C. Personal property is allodial (i.e. you own the very thing itself, as opposed to estates which are separate from the land itself) so no estates with personalty. Yet there is still a practical need for such things, as in this case where mother wanted to give successive interests in personalty to her children.

2) Facts: Emily Swan (the testatrix) made a bequest (i.e. disposition of personalty by will, as opposed to devise which passes realty, and a disposition includes both of these) that her personalty (e.g. jewellery) should be left to her daughter, with a remainder in the event of her daughter dying childless that the personalty should go to her son. The daughter died childless, and the son is now claiming proprietary interest from daughter’s estate. He is claiming compensation since daughter had actually broken up some of the jewellery in question, and

action of tort not available since torts die with the wrongdoer (i.e. the son is arguing that the personalty should have been maintained and passed on to him).

3) Issue: The judge considered 5 different ways of making this “estate”-like bequest effective:a) Ownership in executors (i.e. trustees) – the executors might keep legal title of the personalty,

and the participants (daughter then son) would only have the use/benefit of personalty, held in trust for them by the executors

b) Ownership in ultimate taker, usufructuary interest in first taker – the first taker (the daughter in this case) might only have a usufructuary interest (i.e. the right to the use and enjoyment of something, separate from ownership) and the remainderman (the son) will be the legal owner

c) Ownership in first taker, and subsequent takers have executory (i.e. yet to be performed) “gift over” (i.e. an interest created upon expiration of first taker)

d) (Accepted by court): First taker is trustee (either with regard to ownership or possession) for the remainderman, subject to her own life interest (i.e. she is tenant for life). Thus daughter has allodial ownership of personalty since she is trustee, and she is then also the first beneficiary, and the son is the second beneficiary, and when she dies her estate takes over as trustee for ultimate beneficiary. So trust splits allodial legal title (which stays put) from equitable interests i.e. use/benefit (and beneficiaries can change successively).

e) First taker is bailee (i.e. has lawful possession, but not ownership, so still have to determine owner in this option). This implied bailment contract was the courts second preferred option (bailment: e.g. if you find something you become the bailee and can protect it from the whole world except against someone with a better interests i.e. ownership or prior bailee)

4) Decision: by viewing the daughter as a trustee (or alternatively as a bailee) she had an obligation to maintain the personalty for the second beneficiary, the son. Since she did not, the daughter violated a proprietary interest (i.e. breach of trust), so her estate has to provide compensation to the son. Note that an injunction could have be used against the daughter (while she was alive) to protect the personalty from damage or loss for the subsequent beneficiary (the son).

5) Comment:a) Note then that can have an equitable interest in personalty, and today most trusts are of

shares and bonds rather than land.b) But cannot do this at all with consumables, nor with future property (which can only be the

subject matter of a contract)c) However, courts have been reluctant to allow incorporeal interests from land law to invade

personalty law e.g. difficult if not impossible to attach covenants to chattels in the same way that covenants can be made to “run” with the land (e.g. a restrictive covenant that binds future owners of the land to, for example, limits on buildings that can be placed upon the land)

Successive legal interests in personalty with wills: title in ultimate holder + other life interestRe Fraser (1974) (B.C.C.A.)1) Swan provided the theoretical basis for using trusts to allow for successive interests in

personalty. This case recognizes successive interests in personalty at law, without the use of trusts (although there is some notion of trusts here, since the executor acts like a trustee)

2) Facts: Deceased’s will gave a “life interest” in all his property (both realty and personalty) to his wife, and the residue to a charity (senior citizen’s housing society). This case was brought over a dispute in taxes (i.e. succession duties) with the executor claiming cannot have a life interest in personalty, and the charity would not know what it was to actually receive due to encroachment.

3) Trial judge: found that personalty can be held by widow in life interest with an executory gift over to the charity, but that she also had an absolute power of encroachment i.e. she could use up the personalty itself, the corpus (i.e. the capital), bit by bit over time, and since absolute, there might not be anything left by the time she dies, in which case the charity would get nothing (Encroachment allows nibbling according to the terms of that encroachment, and is often set up on purpose to allow for circumstances where the income from the corpus is not sufficient e.g. might specify encroachment allowed for education of children)

4) Decision:a) Considered the intention of the testator, and concluded the following.b) The ultimate holder (the charity) has a vested interest (i.e. is absolute owner) in the

personalty, but its enjoyment is postponed while the first holder (the wife) has her “life interest” (use, usufructuary, possessory) in it. Thus the first holder can enjoy the revenue from the corpus, but no more (since nothing in the will to suggest any more was intended). Thus she cannot encroach upon the corpus but rather she must preserve the personalty in its entirety for the ultimate recipient (i.e. she has a fiduciary duty towards the charity).

c) The court rejected the suggestion that the wife obtained absolute ownership in the personalty subject to an executory (i.e. yet to be performed) bequest (i.e. she must pass it on) upon her death to the charity. However, even with this approach the intention of the will was still not to allow encroachment.

5) Comment:a) This decision seems to go against the common law notion that personalty is only capable of

indivisible ownership – thus this is an exception to that principle but only applies in the case of wills so far – similar successive legal title so far unknown in inter vivos (between living people)

b) Some feel the court did not need to do this, but could have instead used the trust approach (and in fact the will in this case did create a trust), which allows successive beneficiaries to be specified both inter vivos and testamentary.

Common law: marital unity, life estates curtesy & dower, “use” for separate equitable interest1) Historically at law:

a) Woman who married lost her property because of “marital unity” – husband seized all of her property (except personal paraphernalia) and he became entitled to all income from such land. To sell this land, both spouses had to act together. She could not contract or sue. Husband jointly liable for tort’s committed by her, either before or after marriage. Husband had obligation to support her, and this survived into widowship (wife considered under the “wing, protection and cover” of husband, hence the term coverture to describe the marriage relationship)

b) These rules also helped create gender-role stereotypes i.e. to exclude women from public domain (e.g. could not contract), kept them reliant on husband for sustenance, and took men out of the home to provide for their family

c) Marital unity dismantled piecemeal in mid C19th (and declared completely dead in Ontario in 1978).

d) Curtesy: if wife died, husband (widower) automatically got life estate in all lands she brought into the marriage (provided that she would have been entitled to those lands upon her death, and that she had had a child capable of subsequently inheriting the land). Abolished in B.C. in 1925 by the Administration Act Amendment Act.

e) Dower: if husband dies, wife (widow), provided certain conditions met (e.g. she was capable of producing a child who would be capable of inheriting the land), was entitled to 1/3 of

deceased husband’s realty. Designed to provide her with shelter, and overruled the rules of primogeniture i.e. that eldest son takes all property on death of father. Husbands could insulate their property from dower through a form of conveyance called “deed to uses”. Also abolished in B.C. in 1925 by the Administration Act Amendment Act

2) Historically in equity (increased married woman’s legal capacity considerably):a) Usually through a marriage settlement, the “use” was used to allow wife to have property

separate to her husband (and keep it away from his creditors) – title was held by a third party trustee/feoffee for the use of the wife.

b) Wife could dispose of this equitable property by deed or will, and could be her own trustee. She could contract, sue and be sued in respect to this property. Restraints on alienation (disallowing inter vivos transfer) could be added to avoid coercive husband from pressuring her to transfer it to him

c) However, to set up such separate property required expensive lawyers, so practically only available to the wealthy.

3) Late C19th: English Married Women’s Property Act 1882 adopted the equity approach to allow married women to have separate property as if they were feme sole (i.e. like unmarried women who could own property like men). Similar legislation throughout common law provinces.

4) With separate property, and now that marital unity, curtesy and dower are gone, need legislation to deal with property during marriage, on marriage breakdown, and when one spouse dies.

Alienability, Torrens land title system, Indefeasibility

Alienability – source in 1290 Quia Emptores, completed in 1660 Abolition of Tenures Act1) The alienability (from transferor to transferee) was completed in 1660, for both inter vivos

transfers and by will:a) Inter vivos:

i) 1290: by statute Quia Emptores, subinfeudation replaced by substitution, and so fee simple became freely alienable inter vivos (prior to that consent of tenant’s overlord was required) except for tenants-in-chief (i.e. holding directly from Crown).

ii) 1327 tenants-in-chief were given right to sell their interests (but with fine payable to the Crown).

iii) 1660 Abolition of Tenures Act: abolished this fine for tenants-in-chief, so after that alienability inter vivos was fully established.

b) Testamentary:i) Originally only personalty, not realty, could be disposed of by willii) The “use” got around this: A would transfer land inter vivos to feoffee B for the use of A

during A’s lifetime, with remainder to go to someone specified in A’s will (equitable interests could be disposed of by will)

iii) 1535: Statute of Uses got rid of this technique, but was not populariv) 1540: Statute of Wills allowed all lands held under socage, and 2/3 of lands held under

knight service to be passed by willv) 1660: Abolition of Tenures Act converted knight service to socage, so completing

alienability in willsvi) B.C. Estate Administration Act now specifies who gets what if die intestate (i.e. without

will), and if no one possible, escheats to Crown

Mechanics of transfer: from historical livery of seisin to modern documentation1) Early feudal times (most people were illiterate): livery (delivery) of seisin (seisin = the

possession of a freeholder) was a public ceremony signifying alienation of either title or right of

immediate possession, and was necessary to grant any freehold estate. It involved the two parties, with public witnesses, walking around the land, and then the transferor handing over a handful of dirt or a broken branch from a tree to the transferee, and the transferor would then leave the property at once leaving the transferee in possession. Written evidence of such livery was made compulsory by the 1677 Statute of Frauds.

2) The requirement to actually be on the land to make the transfer, and the public nature of it, led some (who sought privacy for example) to develop alternative means of transfer. For example, if A agreed to sell land to B, then after B paid but before “livery of seisin” A would be seised to the “use” of B. With the Statute of Uses this “use” was executed, and so B gained legal title without the ceremony. Over time “livery of seisin” was almost completely replaced by such methods.

3) In England, the Real Property Act of 1845 recognized and simplified these alternative methods, allowing for corporeal interests to be transferred by grant (i.e. by deed, a document under seal) as well as by livery of seisin. The documentation had to be delivered, replacing the ceremonial delivery of the land in livery, and hence the phrase “signed, sealed, and delivered”.

4) Deeds, not livery, came to Canada. Today, contracts transferring land have to be in writing, but do not have to be sealed. The Land Title Act contains the forms for transfer (and even computerized records/transfers today).

Conveyancing: Common law, Deeds registration, Torrens Title registration1) Historically, common law conveyancing:

a) If there was an error in the past, it will be corrected (by the nemo dat principle, cannot give what you haven’t got)

b) E.g. A sells to B who gives in will to C who sells to D who sells to E – but suppose recently discovered that C was witness to B’s will, so cannot benefit from it, then C did not have proper title to land, and so therefore neither D nor E have good title (it will belong to some other benefactor from residuary clause of B’s will).

c) Searching for good root of title was therefore necessary on every conveyance to go back through time and make sure each conveyance is good (looking for livery of seisin in older days, then for deeds as they took over, and may need to check mortgages, wills, births, etc.), otherwise latest person will lose out if discovered – but documents spread out all over the place, and had to find and read them all

d) Theoretically the search should go all the way back to original grant from the Crown, but a limitation period of 60 years was usually recognized.

2) To address difficulties finding all these documents, Deed registration required all documents to be stored at registry. Still needed same searching of title however, since defects would be corrected as at common law above, but documents not registered could safely be ignored. Still operates in Maritimes and earlier-settled parts of Ontario.

3) Title registration systems avoid the need for search – register establishes all interests in land, and issues certificates of title.a) Developed in England in mid C18th and has now brought most of land in England under it,

and Ontario largely on this system.b) Torrens system in 4 western provinces, New Zealand, Australia.c) 1861: in B.C. deed registration introduced on the mainland, Torrens on Vancouver Island,

and when the two colonies joined in 1870 the united colony adopted the Torrens title registration system by the Land Registry Ordinance.

General Principle of Indefeasibility: curtain drawn over previous errors, mirrors situation1) B.C. Land Title Act s.23(2) (previously the Land Registry Act): indefeasibility of title in fee

simple (indefeasible = incapable of being defeated or altered) is cornerstone of Torrens land title system: once land registered and certificate of title issued, “curtain drawn” on previous errors, and current title certificate “mirrors” (i.e. reflects completely) current state of affairs. Thus an indefeasible title is conclusive evidence at law and in equity, against the Crown and all other persons, of title to an estate in fee simple. However, there are some exceptions (which vary from jurisdiction)

2) Creelman v. Hudson Bay Insurance (1920) (J.C.P.C.)a) Facts: Hudson Bay was holding land and there was a possible defect in title. Under the old

system, if such land was sold to another party and the defect then discovered, that purchaser would lose out since the land would be returned to the proper owner.

b) Decision: Hudson Bay had registered title for the land under the B.C. Land Title Act, which effectively corrects any defect, and so the third party could not get title back even if there was a defect in the root of title.

3) If there was a past defect, compensation possible under Crown insurance fund

Exceptions to Indefeasibility: lease (up to 3 years) with occupation, builder’s/mechanic’s lien1) B.C. Land Title Act s.23(2)(d) a lease for a term not exceeding 3 years with actual occupation

i.e. A buys land (“blackacre”) from B sight unseen, and when A tries to move onto property finds it occupied by X who B had given a lease to

2) B.C. Land Title Act s.23(2)(g) a claim of builder’s lien (lien = right to hold the property of another for the performance of an obligation, builder’s/mechanic’s/garageman’s lien = a statutory claim under the Builder’s Lien Act to secure priority of payment for services rendered or materials furnished after work on construction or repair of buildings has been performed – lien attaches to the estate of the owner), judgement, pending court proceeding

3) Carr v. Rayward (1955) (B.C. Co.C.)a) Facts: plaintiff undertook plumbing work for original owner, then land sold to the defendant

(who registered it and obtained certificate of indefeasible title showing his as owner free of encumbrances), then plaintiff filed his mechanics lien. Can this lien now be effective?

b) Decision: judgement for the plaintiff: indefeasibility of title is expressly subject to such liens registered after title registration by the Land Title Act s.23(2)(g), so long as the lien is filed within the time specified by the Builder’s Lien Act

c) Comment: in a similar case in Alberta the lien was not valid since the statutes there do not have this express exception

Exceptions: fraud/forgery without knowledge – from deferred to immediate indefeasibility1) B.C. Land Title Act s.23(2)(i): indefeasible title is subject to: “the right of a person to show

fraud, including forgery, in which the registered owner, or the person from or through whom the registered owner derived his right or title otherwise than bona fide for value, has participated in any degree”. Fraud = something said/done/omitted with design of perpetuating what that person must know to be false. Based on intention, but constructive fraud = reckless, could have found out the truth but turned a blind eye. Forgery = act fraudulently by making false documents.

2) Under common law forgery is a nullity, so a forged instrument purporting to transfer title should have no effect, and is considered void. However, if such a void instrument is then registered, does the newly named holder really become the owner of indefeasible title? Certainly, if the newly registered holder was involved in the fraud/forgery, the answer is no by s.23(2)(i). But what if currently registered owner had no knowledge of the fraud/forgery i.e. they were a bona fide purchaser for value. Opinion is divided – deferred indefeasibility (Gibbs v. Messer) says

no (although it would provide good root of title i.e. the next bona fide purchaser for value would obtain good title), whereas immediate indefeasibility (Frazer v. Walker) says yes

3) Gibbs v. Messer (1891) (J.C.P.C.)a) Facts: Appeal to J.C.P.C. from Australia. Solicitor S (Cresswell) given power of attorney by

the owner O (Messer’s) of land. S fraudulently made up a fictitious person F (Cameron) and transferred O’s land to F by forging O’s signature, and then registered the transfer. S then fraudulently arranged a loan from mortgagee M (McIntyre) to F secured by mortgage of the land, and M registered the mortgage (M was an innocent party with no knowledge of the fraud/forgeries). S absconded with the money

b) Note: in Australia the registration system also allows indefeasibility for mortgages – for us in B.C. indefeasibility only applies to fee simple, so we can consider this second registration as another fee simple transfer i.e. the principles here can still apply.

c) Issue: There are two innocent parties here: O and M. Who should bear the loss of the loan? Common law (by the nemo dat principle) says S had nothing to give, but does the registration legislation change this?

d) Rule: deferred indefeasibility = errors outside the register (e.g. a transfer acquired from a forger or from a fictitious person through forgery) do not give indefeasible title. However, the resulting errors in the register do not prejudice subsequent bona fide and for value purchaser (or mortgagee in Australia) and so the subsequent purchaser (mortgagee) does get indefeasible rights

e) Decision:i) F, the currently registered title holder, doesn’t exist, so O’s name restored to the registerii) In the first transaction O to F there was no error in the registry (O was the true title

holder), but rather the error was outside the registry (i.e. S’s fraud). Thus F did not gain indefeasible title, even though F was registered as the new title holder (court said the analysis was the same whether or not F existed).

iii) However, a subsequent registered, bona fide and for value transaction F to M would give M indefeasible rights, since now there is an error in the registry (i.e. F is wrongly named as the title holder), and M should not have to go behind the registry to check for errors within it (i.e. basing this decision on the purpose of the land title legislation)

iv) But, in the second transaction in this case there was another error outside the registry – the mortgage F to M was not conducted between F and M (obviously, since F doesn’t exist) but rather between the forger S and M, and M relied upon the honesty of S. It was M’s duty to confirm that S really did represent the registered principal F, and that the deed drawn up by S really was executed by F. M failed in this and accepted S’s forgery duty (i.e. not saying M participated in the fraud but was careless – sounds a little like constructive fraud, although this was not stated and there are no cases suggesting this), and so M does not have indefeasible rights even though they registered the mortgage. Thus the mortgage is invalid and of no effect

v) If a subsequent bone fide transfer M to X occurred, however, then since M was registered and the error was now in the registry, X would obtain indefeasible rights

4) Frazer v. Walker (1967) (J.C.P.C.)a) Facts: Appeal to J.C.P.C. from New Zealand. This case involved forgery (but no fictitious

persons). H and W (husband and wife) jointly owned a farm. W signed herself and forged H’s signature to borrow money from mortgagee M, secured by mortgage on the farm, and this mortgage was registered (again note in B.C. only fee simple gets indefeasibility, but the principles of this case still apply – pretend the mortgage was a transfer of title). W made no payments to M, so M then sold the farm to purchaser P, and this transfer was registered. H

had no knowledge of these transactions, and M and P acted in good faith with no knowledge of the forgery

b) Issue: H claims his interest in the land is unaffected and that the mortgage is a nullity.c) Decision:

i) The court could have simply applied the Gibbs rule that the first transfer (from H/W to M) created a good root (but not good title) in M, and the second transfer (M to P) then gave good title to P since the error was now in the registry. But they didn’t and instead distinguished by saying Gibbs looked at the purpose of the legislation rather than the specific provisions, and it involved a fictitious person (although perhaps this was just a way of avoiding the embarrassment of overruling their previous decision). In this case the court looked at the first transfer, from H/W to M, stating it to give indefeasibility to M. So they didn’t expressly overrule Gibbs (and Gibbs perhaps lives on in the special case of a fictitious person) although this case probably has practically overruled Gibbs.

ii) The court said should not decide this issue based on who can get insurance from the title fund

iii) Even though the legislation requires proper signatures on an instrument to be acceptable for registration, the fact that the forged mortgage instrument was registered means that indefeasibility immediately applies. Otherwise the whole purpose of registration would fail (since would need to search behind the registry)

iv) H may be able to claim compensation under the title registration legislation, and can also claim against the newly registered proprietor in personum founded in law or in equity (in Rem = who has the indefeasible title, but allowing in personum claims allows a court to give title to one person, but then impose on them an in personum trust to hold it for the benefit of another, just like the courts of equity used to do – see below Me-N-Ed’s Pizza v. Franterra)

d) Rule: A person’s name, once entered into the registry, even though it came from a void instrument, gains indefeasible interest immediately, and so only those claims listed as exceptions in the legislation are then allowed (such as showing fraud/forgery on the part of the newly listed person, but M in this case was not involved themselves in the fraud/forgery)

5) Canada:a) In Saskatchewan, Hermanson v. Martin (1983) (Sask. Q.B.) took the Frazer immediate

indefeasibility approachb) In B.C. the wording of .23(2)(i) appears in accord with Frazer immediate indefeasibility

(provided the registered owner didn’t participate in the fraud), although one or two cases have applied the concept of deferred indefeasibility (although these cases didn’t consider Frazer)

c) There is a contradictory section in the B.C. Land Title Act s.297(2): “A person taking under a void instrument is not a purchaser and acquires no interest in the land by registration of the instrument”. This suggests Gibbs deferred indefeasibility. However, Canadian Commercial Bank v. Island Realty (1986) (B.C.) has limited the application of this section to the insurance part of the Act

6) The middle part of s.23(2)(i): “the right of a person to show fraud, including forgery, in which the registered owner, or the person from or through whom the registered owner derived his right or title otherwise than bona fide for value, has participated in any degree”. This means that if someone participated in fraud to obtain land, and then gave that land to you by gift/will/etc. (i.e. you did not purchased it for value) then you have no better claim to title than the person who gave it to you

S.29 notice of unregistered interest no effect, but actual/constr knowledge+dishonesty = fraud1) B.C. Land Title Act s.29(2) except in the case of fraud, someone contracting, proposing to take

or taking from a registered owner either land or a charge on land is not affected by notice of an unregistered interest other than (c) an interest with registration pending, (d) a lease of up to 3 years with actual occupation

2) Attempt to get rid of the equity doctrine of notice, which said that a purchaser, if not for value, or not bona fide, or if bona fide and for value but they had actual or constructive notice (i.e. they should have known) of a lease, they must then honour that lease (only a bona fide purchaser for value with no notice did not have to honour equitable interests such as a lease). Getting rid of this is required for the mirror principle in land title registration i.e. all interests must be registered otherwise they have no effect. However, the courts have decided that in some cases notice constitutes fraud, and so falls within the exception to s.29 i.e. almost a judicial repeal of s.29. Generally, someone doing something in the normal course of business will not constitute fraud, but if someone tries to bring themselves within s.29 i.e. tries to use the statute to aid in a fraud, then s.29 will not protect them

3) S.29 protects against unregistered interests, but not if acknowledges and acted upon: Me-N-Ed’s Pizza v. Franterra (1975) (B.C.C.A.)a) Facts: plaintiff (tenant T) had a 20 year lease from the first defendant (owner O), but did not

register it. O then sold the land to the second defendant (purchaser P), and this sale was registered. P had notice (i.e. knew) of the lease when they purchased the land from O, adjusted the purchase price according to pre-paid rent by T, had T now pay rent to P, and later assigned the rent payments from P to a third party.

b) Decision: if the lease had been registered, P would have been bound to honour it since it would have been an endorsed charge on the land. However, the lease was not registered and so P could have ignored T’s lease since although T was in possession it was for over 3 years (see s.29(2)). Thus, at law, there was no assignment of the lease. However, P acknowledged, acted upon and benefited from the lease, as if the lease had been registered as a charge on the land, and so there was an assignment of the lease in equity. Therefore P estopped from denying lease, and the unregistered lease is protected, and T is entitled to have a registerable lease delivered to him by P i.e. P clearly has indefeasible title, but by in personum order P required to recognize lease

4) S.29 protection if unaware of unregistered interest at time of transaction completion: Central Station v. Shangri-La (1979) (B.C.S.C.)a) Facts: A registered owner O of land subject to a registered mortgage from mortgagee M,

leased the land to the plaintiff tenant T (but this lease was not registered). O defaulted on their mortgage payments to M, foreclosure, and order nisi (i.e. an order that takes effect after a period of time to allow payment, and if not then order absolute). M agreed to sell the land to the defendant purchaser P if O didn’t pay up by a certain redemption date. After this agreement was completed, but before the redemption date, P became aware of the lease held by T. O did not pay up, and P became the registered owner. T then sought to enforce it’s lease

b) Decision: s.29, by its wording, protects a purchaser from unregistered interests if they did not know of that interest at the time of completion of the transaction = time at which became contractually bound to buy the land (even if they then became aware of the interest prior to registration). So actual notice after completion (but before registration) is not fraud since continuing to registration is just normal course of business, and hence s.29 protection and not bound to honour the lease. Thus T’s action to enforce their lease failed.

5) Actual knowledge of previous fraud or unregistered interest, or constructive knowledge (i.e. suspicion but no further enquiries, failure to take the steps to find out the truth that a reasonable person would have taken) plus dishonesty, constitutes fraud and removes s.29 protection: Nicholson v. Riach (1997) (B.C.S.C.)a) Facts:

i) 20 years previously the respondent (mother M) bought property, and due (she claims) to pressure and undue influence (physical and verbal abuse) by her son S she agreed that S should have 50% interest in the property. M and S were registered as co-owners. She provided all the funds for purchase and subsequent taxes and maintenance.

ii) 20 years later, damages awarded against S for an assault on the petitioner P, and since not paid, the court ordered S’s interest in the property to be sold to satisfy payment of the damages. P herself purchased the 50% interest, and it was transferred into her name (so she was not tenant-in-common with M)

iii) P now seeks partition and sale of the property. She claims registration of her 50% interest gives her indefeasible title to that interest regardless of any previous flaws in giving the son S the 50%. Court ordered the sale.

iv) M now claims in equity that the 50% interest held by the son was obtained by undue influence and that it was held in trust for her, and so the transfer to the petitioner P was a breach of trust and unlawful.

b) Issue: Absent fraud by the petitioner, the Land Title Act clearly gives her the right to proceed with the sale. So, the question is, did the petitioner participate in a fraud to obtain the 50% interest i.e. did she have knowledge of the alleged fraud by which the son originally obtained his 50%, or that the 50% was then held in trust for M

c) Rule:i) Even though the vendor’s (i.e. the son’s) original obtaining of the 50% may have been

by fraud, this will not affect a subsequent registered purchaser (the petitioner) unless that purchaser participated in the fraud to some extent.

ii) To show such participation in fraud, it must be shown that the subsequent purchaser had either actual knowledge that the vendor did not have title, or at least an arousal of suspicion must have been raised followed by an abstaining from making enquiries for fear of learning the truth i.e. there must have been an element of dishonesty combined with such constructive knowledge.

iii) A simple lack of making enquiries which could have uncovered the fraud if not enough to show participation in fraud on the part of the purchaser.

d) Decision: Although the petitioner in this case did have some knowledge of the respondent’s claim of trust on the 50% interest, by the actions of the petitioner (such as a letter written to the mother M recommending they obtain legal counsel) there was no dishonesty or obligation to make further enquiries. Further supporting this finding for the petitioner was the fact that 20 years had passed during which the mother did not challenge the son’s 50% interest. Additionally, the mother did not take action until much later, even after being notified of the impending sale by the petitioner. These laches (delays) and acquiescence’s would make it inequitable to further delay or defeat the petitioner’s interest.

Indefeasibility is to protect bona fide purchasers for value, not just registered ownersPacific Savings v. Can-Corp (1982) (B.C.C.A.)1) Facts: After a final order of foreclosure (order absolute), a certificate of indefeasible title was

issued to the mortgagees. The mortgagors filed a motion to re-open the final order, obtained a certificate of lis pendens, and registered this lis pendens at the land registry office (see s.23(2)

(g) above, a notice to anyone dealing with the property to say legal issues unresolved). A new purchaser then tried to register their title later the same day. The mortgagees claim that as registered owners the mortgagor cannot now challenge their title.

2) Decision: The Land Title Act does not bestow conclusive indefeasible title on the registered owner – courts may order that some other person is properly entitled to the title. The mortgagee, as a party to the original dispute, had not obtained indefeasibility until their dispute was resolved. But such orders could not prejudice the rights of bona fide purchasers for value (so if the new purchaser had registered before the lis pendens, the curtain would have been drawn and they would have obtained indefeasible title). Thus the issuance of certificate of title to the mortgagees does not bar the mortgagors motion to re-open the mortgage.

The Fee Simple

Creation: words of purchase v. limitation, no longer strict need for “and his heirs”1) Recall: “To A” (words of purchase, “who” words i.e. who gets the estate, where

purchase/purchaser means to acquire/the acquirer of an interest in land other than by descent on intestacy e.g. include by gift) “and his/her heirs” (words of limitation, “what” words i.e. what is it that A receives)

2) Inter vivos transfer: historically strict – had to use “and his/her heirs”, and if no words of limitation, or the wrong words (even “in fee simple” was not adequate) would instead create a life estate

3) By Will transfer: historically more flexible, and if a clear intention to pass fee simple, even though the magic words not used, would pass fee simple

4) Inter vivos trust: the courts of equity were also more flexible and without words of limitation would still pass fee simple if clear intent

5) The strict rules of inter vivos transfer would often create life estates where fee simples were intended, so in the early C19th statutes passed provided new rules of construction to rectify this.

6) Today, the B.C. Property Law Act applies to inter vivos transfers – s.19 Words of Transfera) S.19(1) “in fee simple” without “and his heirs” is adequate, andb) S.19(2) if no words of limitation, then fee simple or the greatest estate possible would be

transferred, unless of course the transfer expressly provides otherwise (e.g. if only had a life estate, then could only pass an estate autre vie)

7) The B.C. Wills Act applies to will transfers – s.24 Devise without words of limitation:a) If no words of limitation and without contrary intention in the will, fee simple or greatest

estate possible would be transferred8) If no words of limitation and no contrary intent, fee simple (or greatest estate possible) passes:

Re Airey (1921) (Ont. H.C.)a) Facts: Deed of transfer contained no words of limitation, nor did it say “in fee simple”.b) Decision: Provided there is nothing to the contrary (i.e. the deed is a conveyance and not a

“lease” or “demise”) then with no words of limitation fee simple is transferred9) Surrounding facts to will only relevant if ambiguous, and distinguish words of limitation from

words of purchase: Re Ottewell (1969) (S.C.C.)a) Facts: Frank, in his will, devised to his brother Fred his property “to hold unto him, his

heirs, executors and administrators absolutely and forever” and had nothing in it to provide for the case if Fred died before Frank. Fred had similar will giving everything to Frank. Fred died first, and so all his estate went to Frank (Fred’s only daughter got nothing). Frank did not change his will and then Frank died. Fred’s daughter claimed she should get Frank’s

property, but Frank’s other next of kin claimed it should be shared amongst all of them (of which Fred’s daughter is only one).

b) Decision: Only if there is ambiguity in the will should the surrounding facts/circumstances when the will was executed be considered. In this case, Frank’s will is not ambiguous, so such facts are irrelevant here. Even though don’t have to use words of limitation for realty, and words of limitation don’t make sense with personalty, they were used here and so court said they should be interpreted and meaning should be given to them. Court decided the words quoted above are words of limitation and not words of substitution (i.e. not words of purchase as daughter was claiming). Hence Frank’s property was only devised to Fred (and not to Fred’s heirs) and since Fred was dead, Frank effectively died intestate. Hence property should be divided amongst all of next of kin.

c) Dissent: Since don’t have to use words of limitation, the quoted words above don’t have to be given the usual technical meaning (i.e. “and his heirs” technically has meant words of limitation, but they don’t have to here). There are 2 assumptions when interpreting wills:i) Presume against intestacyii) Presume every word has a meaningDissent therefore concludes quoted words are words of substitution (i.e. of purchase) and therefore daughter should get all of Frank’s estate

d) Comments:i) Have to be careful using words that are not required in the particular context (e.g.

beware using off-the-shelf computer documents for wills and such since may contain all sorts of unnecessary stuff for the current situation)

ii) Today, the daughter might consider suing the lawyers who drafted the joint cross wills.iii) There has been statutory changes in some jurisdictions for ‘lapsing” where beneficiary

of will is dead, in which case the daughter in this case would then get Frank’s estate.

Repugnancy: if give absolutely cannot control it’s destiny – intention in wills, formal in deeds1) Leading case sets out the basic principles (there are exceptions): repugnancy – either 1st gift

dominant (fee simple) or 2nd gift dominant (life estate) or take middle ground of life estate plus encroachment: Re Walker (1925) (Ont. App. Div.)a) Facts: Deceased husband’s will gave his property to his wife but added that “should any

portion of my estate still remain in the hands of my said wife at the time of her decease indisposed of by her such remainder shall be divided as follows …”. Upon the death of the wife, some claimed certain property according to her will and others claimed that same property according to the husbands will. Trial court said widow only gets life estate.

b) Decision: Basic idea of repugnancy = it is impossible legally to give something absolutely (i.e. fee simple) but to then control it’s destiny e.g. by specifying some gift over (the counter argument will be that only a partial interest was to be given (e.g. life estate), with remainder going to someone else). If such an attempt at control is made, the court must distinguish between 3 possibilities by determining the dominant intention of the testator and then rejecting the subordinate intention as repugnant:i) The gift is dominant and the gift over repugnantii) The gift-over is dominant, so the first named gift only gets a life estateiii) Middle ground: as in ii) only a life estate is given, but it may be encroached upon (e.g.

sold) during the lifetime of the life-tenant, with whatever remains as a gift overIn this case option i) found appropriate, so widow gets fee simple.

2) Interpreting intention / expectation of testator so as to give life estate, even though will said “free use” and “unspent … if any”: Re Richer (1919) (Ont App. Div.)

a) Facts: Deceased’s will gave his widow the “free use” of all his property, with the balance “that will remain unspent … if any” on her death going to their children. The lower court found that the widow should get fee simple. Trial court said widow gets fee simple.

b) Decision: Although the words “free use” could imply fee simple, there is in intent / expectation in the will that a balance will remain on her death to go to the children. The words “if any” not given much attention, rather the word “unspent” certainly allows the widow to spend monies and to use up goods and chattels, but court said the word is inapplicable to land i.e. land cannot be “spent”. Thus life estate to land given to widow with remainder to the children.

c) Comment: “unspent” may not be as inappropriate to land as court suggested here – consider cutting timber, mining, etc.

3) Re Walker found too formal (broader intention allowed here): testator’s intention should be determined from whole will and (if ambiguous) circumstances when will was made: Re Shamas (1967) (Ont. C.A.) :a) Facts: Deceased’s home drawn will gave all his property to his wife, to belong to her till all

the children reached 21. If she remarries, she will get a share like the children. If not, she will keep the whole and each child will get an equal share on her death. After his death, widow thought everything belonged to her and she didn’t keep accounts, but upon reaching 21 the children challenged this. Trial court said life estate to wife with right to encroach (but only up till last child reaches 21).

b) Rule: The intention of the testator as indicated by the whole will (and not just a particular provision) and from relevant surrounding circumstances at the time the will was made should be determined

c) Decision: Found Re Walker too formal. Instead, should just interpret the document as a whole to give effect to the intention of the testator, and should “sit in the testators armchair”. From the will, widow given life estate subject to it being divested on her remarriage, and to encroach on the capital till youngest child reached 21. From relevant circumstances when the will was made, the testators property was not enough to support the wife and children before and after all reached 21, and so suggests an intention that the wife should be able to encroach on the capital as she thought fit. Hence she can also encroach on it after all children reach 21.

4) Interpreting a deed is a relatively formal process, and the granting clause takes priority over habendum clauses, even if intention to follow habendum clauses is clear (this is different to interpreting wills, where court should look at the whole will and perhaps even surrounding circumstances): Re Tremblay and Township of Tay (1984) (Ont. C.A.)a) Facts: to avoid statutory registration / planning requirements, an attempt was made to

transfer lots of a subdivision to 5 people in a checkerboard fashion (so no individual person had 2 adjacent lots). However, the conveyance was inept. An inter vivos deed has many types of clauses – the granting clause here granted the entire area equally to all 5 people, whereas the separate habendum clauses (plus schedules) listed out which specific lots should belong to whom (and it was not equal).

b) Lower court: gave 1/5 interest of every lot to each of the 5, since the habendum clauses were incompatible with the granting clause (and because the attempted conveyance was fraudulently and insultingly attempting to avoid the legislation)

c) Decision: Agreed with the lower court. Although the objective of checker-boarding is clear, the intention must first be determined from the wording. Since the wording is clear and unambiguous, no other rule of construction or reading the document as a whole can save it

from a finding that the habendum clauses are repugnant to the granting clause (and so the granting clauses win out).

The Life estate

Creation by express words “for life”, by statute, pur autre vie and devolution on death1) Creation by act of the parties:

a) Recall life estate “To A for life” and pur autre vie “To A for life of B”. Express words needed since otherwise by B.C. Property Law Act s.19(2) and B.C. Wills Act s.24 will transfer the greatest interest possible (e.g. fee simple)

b) Recall can create difficulties if grant to B for life and then to C, since restricts what B can do with the property, and more common to now use an equitable life estate

2) Historya) Recall life estates were also created at common law by dower (to widow) and curtesy (to

widower). Both finally abolished in 1925 recognizing the fact that husbands and wives were not totally separate as to property rights (only if one spouse died either totally or partially without will did the other acquire any automatic rights – see B.C. Estate Administration Act). However, this separate property regime has been changed by legislation as follows:

3) Creation by statute:a) The B.C. Land (Spouse Protection) Act allows a one spouse (e.g. wife) to register/file an

entry in the Land Title Office against a “homestead” (i.e. land/interest registered in other spouse’s name (e.g. husband) on which there is a dwelling currently occupied by husband and wife as their residence or so occupied within previous one year – not to be confused with the now repealed Homestead Act). Once registered, owning spouse (e.g. husband) cannot dispose of the homestead inter vivos without other spouse’s (e.g. wife’s) consent in writing, and upon owning spouse’s (e.g. husband’s) death in both testamentary and intestacy by s.4 other spouse (e.g. wife) entitled to life estate despite any testamentary disposition (the legal title will pass subject to trust to other spouse) but subject to creditor’s interests foreclosure / payment of debts. Further, no contracting out of this is permitted i.e. spouses cannot agree between themselves that this Act will not apply, but the Act is rendered inapplicable if the spouses are separated.

b) The B.C. Estate Administration Act:i) If a spouse dies intestate, the estate goes to the surviving spouse (s.83) subject to

entitlement to the children (s.85).ii) s.96 automatically gives to a surviving spouse, in an intestacy, all of the “household

furnishings” (chattels associated with the enjoyment by the spouses of the matrimonial home) and (although legal title goes to those entitled to it by law (such as the children by s.85) they must hold it in trust for surviving spouse) a life estate in the matrimonial home (either a building on land or a quite owner by a corporation in which the spouses were ordinarily resident and not leased to another). Note surviving spouse can rent out the property to get income, and can abandon it with intention to give up this life estate.

iii) The Definition of Spouse Amendment Act 2000 came into force July 2000 and amends “spouse” to include common law spouse (cohabited for at least 2 years, in marriage like relationship, including same sex)

4) Recall transfer inter vivos e.g. A holds life estate, transfers inter vivos to B “To B for the life of A”. B holds an estate pur autre vie, and this estate ends with the death of the cestui que vie (“s/he who lives” i.e. the measuring life i.e. A) Of course A cannot dispose by will since the estate comes to an end when the measuring life ends.

5) Devolution on death: there used to be a distinction between a general occupant (“to B for the life of A”) and a special occupant (“to B and his heirs for the life of A”), but the general occupant was abolished by the Statute of Frauds 1677 (now by B.C. Wills Act s.2(a)) so that now on the death of B, the land may be disposed of like any other realty that was held by B.

Family Relations Act (community property regime on breakdown) & Wills Variation Act1) Recall from above:

a) B.C. Land (Spouse Protection) Act – spouse can file “homestead”, other spouse can’t dispose of inter vivos without consent, spouse gets life estate on other’s death (whether testamentary or intestacy)

b) B.C. Estate Administration Act s.96 – on intestacy automatically gives household furnishings and life estate in matrimonial home

c) By Definition of Spouse Amendment Act 2000 spouse includes common law and same sex2) Formalized marriage = registered. Common law marriage = legal capacity to marry and

agreement to marry, so although not formally married recognized as valid marriage. Common law relationship = more general notion of marriage like situation

3) The Ontario Family Law Act concerns property on marriage breakdown and death in that province, in response to the separate property regime e.g. to ensure spouses share the value of assets accumulated during the marriage: In M v. H (1999) (S.C.C.) the definition of spouse (which was limited to heterosexual for spousal support on marriage breakdown) in the Ontario Family Law Act was struck down as unconstitutional – Ontario amended these maintenance sections, but it remains to be seen what effect this will have on spouse definitions in relation to property. Statute only applies to property acquired after marriage but surviving spouse can choose to take what was given in the will or can choose to take what would be given on marriage breakdown.

4) B.C. statutory community property regime: By B.C. Family Relations Act, on marriage breakdown each spouse entitled to one-half interest (court can vary the 50-50 proportion for fairness, taking into account length of relationship, extent to which property acquired by one spouse by gift/inheritance/etc) in each family asset (which are generally those ordinarily used for family purposes, including pensions, but has caused mush confusion/litigation). Only automatically applies to formally married couples, but same-sex and common-law couples can opt in. In B.C. includes property acquired before marriage if becomes a family asset. There is some discretion under this act – length of marriage of about 2 years normal to trigger the property parts.

5) The B.C. Wills Variation Act gives broad discretion to the court if it thinks a deceased spouse’s will does not adequately provide for “the proper maintenance and support” of the surviving spouse and children, so the court can limit testamentary autonomy and to vary the will as it “thinks adequate, just and equitable in the circumstances”. The history and interpretation of this wording was discussed in Tataryn v. Tataryn estate (1994) (S.C.C.) :a) Strict needs/maintenance test: the first approach to interpretation started in the 1920’s where

courts interpreted the Act as only requiring provision for basic needs / maintenance to avoid surviving spouse and children becoming a public charge upon the country (i.e. avoid welfare)

b) Broader marital/parental “moral duty” test: the second approach began in the depression 1930’s where courts extended their interpretation beyond mere necessities to a more generous test i.e. preservation of standard of living. By taking into account moral considerations, this approach gave an equitable share even in the absence of need.

c) The S.C.C. in Tataryn unanimously preferred this second approach. It considered both

i) legal rights / obligations (e.g. to continue the legal duty to support spouse and children after death and avoid unjust enrichment by ignoring contributions during lengthy relationship, an independent child’s contributions, ability of survivors to support themselves, etc as in Family Relations Act i.e. family law principles apply in the context of wills variation) and

ii) moral obligations (e.g. more subjective to make provision for dependent spouse and children as the size of the estate permits and should consider charitable donations, etc.).

Common law: resulting trust, constructive trust (equitable remedy avoids unjust enrichment)1) Resulting trusts work on the theory of the intention by the parties e.g. give donation to cover

someone’s medical bill, but then government steps in and pays it, then the donation money will be held under a resulting trust to be returned to donors

2) Constructive trusts imposed by equity to deal with unjust enrichment e.g.: in response to unconscionable conduct (such as a trustee wrongfully obtaining profits, or person profiting from a crime) e.g. imposed on vendor of house prior to closing of transaction

3) History:a) Recall doctrine of marital unity at common law (wife’s property held by husband, single

legal entity, husband had duty to support and liable for wife’s torts and credit, connected to dower and curtesy).

b) Development of equity which allowed wife to hold separate property on the use, which was usually made inalienable so husband couldn’t pressure her to transfer

c) England 1882: the Married Women’s Property Acts created a regime of separate property so wife could hold property as if femme sole (i.e. just like unmarried women)

d) However, although these Acts were of symbolic importance, women still lacked the practical means of acquiring money or realty. On breakdown of marriage, this separate property regime led to courts denying the right to split up property to give share to the women. This was demonstrated in the infamous case Murdoch v. Murdoch (1975) (S.C.C.):i) Facts: Wife’s money from previous work and from money obtained from her mother,

and very significant labour by her went into ranch owned by husband. On marriage breakdown, she claimed an interest in the ranch

ii) Decision: Her action failed. The court found no intention to create a resulting trust, and seemed to accept the view that wife’s labours no more than those expected of ordinary ranch wife.

iii) Dissent: Laskin J. laid foundation for new concept of constructive trust4) The were statutory responses as described above: the Land (Spouse Protection) Act and the

Family Relations Act. However, before the Family Relations Act the constructive trusts became firmly entrenched in Canada to prevent unjust enrichment by rewarding those involved in household labour, and enlarged over the years to include both common law and same sex relationships. This stuff is not so important now with the Family Relations Act (except for people who do not fall within it):a) This “remedial” equitable remedy of constructive trusts was recognized in the dissent in

Rathwell v. Rathwell (1978) (S.C.C.) and then by majority in Pettkus v. Becker (1980) (S.C.C.) ) where constructive trusts can be applied if the facts show that there has been an enrichment, a corresponding deprivation, and the absence of a juristic reason for the enrichment e.g. no obligation to perform the duties

b) Application of the constructive trust expanded to include the facts in Sorochan v. Sorochan (1986) (S.C.C.) to include a long term relationship but not married and farm property had been owned by man prior to the common law relationship

c) Application of constructive trusts was further extended in Peter v. Beblow (1993) (S.C.C.) for conventional domestic services (12 year cohabitation, woman undertook domestic work and man, the property owner, maintained the property). The court rejected the idea that domestic services cannot found a claim saying that it devalues such women’s contributions and adds to the feminization of poverty. They said an equitable remedy is appropriate even though matrimonial property legislation excludes non-married couples. The entire equity in the home was awarded to the woman.

5) In summary then, the Acts and common law that apply to relationship breakdown and death:

Inter-vivos Intestacy Testamentary Matrimonial breakdown

General (can apply anywhere)

Land (SP) Act Land (SP) Act Land (SP) Act Resulting trustEstate Administration Act

Wills Variation Act

Family Relations Act

Constructive trust

Waste and Life Estates (and other relationships)

Legal waste: permissive (passive), voluntary (active), includes ameliorating1) With life estates there is a danger that the life tenant will exploit the property in a way that

despoils/reduces the value for successive takers i.e. remainderman or reversioner. Problem is there are 2 simultaneous rights –the life interest (exclusive right to possession held by life holder) and the future interest (held by remainderman/reversioner i.e. a present right to future possession). To balance between these rights, the law of waste controls the level of exploitation during the currency of the life estate.

2) Compare with giving sum of money in trust in will, with interest (i.e. income) going to surviving spouse and on their death capital to children – trustee must balance desire to maximize interest by making risky investments with desire to protect capital by making safer investments).

3) The holder of a life interest has right to exclusive possession, profit/income, and can generally use/occupy land as if fee simple. But reversioner / remainderman has right to receive land in substantially (but note not completely) the same form as when granted to the life holder.

4) There are 4 distinct categories of waste, 3 legal and (see below) 1 equitable:a) Permissive waste (passive) – damage resulting from a failure to preserve or repair property.

Life tenant generally not liable unless grant put obligation on life tenant.b) Voluntary waste (active) – positive action that changes/diminishes value of land (e.g. over-

cutting of timber, destruction of buildings, opening new mines, etc.). Generally liable to reversioner / remainderman unless grant of life estate contains exemption expressly permitting life tenant to commit voluntary waste – said to be “unimpeachable for waste”.

c) Ameliorating waste (active) – positive acts that enhance/increase value of land. Generally not liable but can be actionable due to negative side effects such as increased property taxes or a significant transformation of the property Technically voluntary waste, bet reflects division between common law and equity (in common law could only award damages, so if the life tenant cutting down trees to replace by buildings, property value on market would probably go up, so no damages – but with equitable injunction remainderman / reversioner may be able to get cutting stopped if can show it is changing character of the property and so property will not be passed on substantially in the same form).

5) Definition of injury to successive interests flexible – must take into account the local circumstances / nature of the land (e.g. timber estate): Hiltz v. Langille (1959) (N.S.S.C.)

a) Facts: Mother transfers life estate to herself with remainder to daughter, then allows son to cut down trees.

b) Rule: Discussed waster in general and timber cutting in particular:i) Old medieval English law of waste said that can only take timber for reasonable estovers

i.e. as necessary for enjoyment / repair of premises, for fuel, and for making/repairing of agricultural implements and fences

ii) Such restrictions inapplicable to natural lands in Nova Scotia, where cutting timber can be the main value of the land (i.e. timber estates) and if not allowed could render a life estate worse than worthless (due to taxes) i.e. just like planting/selling/replanting wheat, so nature of the land is like a plantation and can do this so long as following standard / reasonable forest practices and not depriving successive holders from doing the same

iii) However, life tenant must not act in a way that constitutes a permanent injury or material prejudice to the inheritance (i.e. to remainderman or reversioner) so that it’s value is diminished.

Equitable waste: no unconscionable waste (even if unimpeachable) and to other relationships1) There are 2 categories of equitable waste. The first applies between a life tenant and

remainderman/reversioner:a) even if the instrument creating the life estate permits voluntary waste (i.e. unimpeachable for

waste) a court of Equity might still, on petition from reversioner or remainderman, restrain life tenant from unconscionable/flagrant waste (i.e. extreme waste beyond normal activities)

b) Vane v. Lord Barnard (1716) (English)i) Facts: On the marriage of his son, father gave himself life estate in castle (without

impeachment for waste) and remainder to his son in tail male. After the father had taken some displeasure with his son, father started to demolish the castle and sell off the materials.

ii) Decision: court of equity granted injunction against further pulling down of castle, and ordered repair.

c) This equitable rule is in statutory form: B.C. Law and Equity Act – s.11 Equitable waste – an instrument granting an estate for life without impeachment of waste does not give a right to commit equitable waste unless there is an express intention to the contrary (raises the possibility that a grant can say “you can commit voluntary waste and you can totally destroy the place” – but might argue this suggests the intention of the grantor (e.g. testator) is really to give an absolute fee simple rather than a life estate, and so might argue repugnancy)

2) The second category of equitable waste (i.e. disallowance to destroy/depreciate the subject matter) applies to other relationships where one party has possession but another has a simultaneous interest, such as tenants in common, joint tenants, mortgagor/mortgagee, tenants in fee simple subject to an executory devise over, partners, purchaser by contract awaiting to perfect title in registry (and who can enforce contract by specific performance). Note no legal right to commit voluntary waste here, so equity stops not just flagrant waste. These basic principles were laid out in City of New Westminster v. Kennedy (1918) (B.C. Co. Ct.) also applied to a tax sale:a) Facts: for failure to pay taxes, the collector of taxes sold the defendants house to the City,

but the defendants had one year, during which they retained possession, to redeem (i.e. to pay their taxes). During that year the defendants stripped the house of everything removable (e.g. doors, windows, etc.)

b) Decision: clearly equitable waste, and no real difference here compared to life estates. Ordered repair of house by defendant.

Obligation/cannot benefit by not paying taxes, can’t sell against remainderman’s wishes1) Injury to title: life tenant cannot benefit (by obtaining fee simple) from her own failure to live up

to obligation to pay taxes: Mayo v. Leitovski (1928) (Man. K.B.):a) Facts: Defendant had a life estate of land, and after her death, fee simple was to pass to the

plaintiff. But the defendant (old and without means) failed to pay taxes and as a result the municipality sold the land. However, out of kindness the defendants own daughter purchased the land at the tax sale, paid the taxes, and then assigned the tax sale certificate back to the defendant. The defendant then applied for title to the land in fee simple, which if granted would effectively exclude the reversioner (i.e. the plaintiff) i.e. life tenant would benefit as a result of her own default in paying taxes

b) Decision: In a sense, the life tenant is a trustee of the corpus of the estate for the reversioner/remainderman and must take reasonable precautions to preserve the state for transmission. In particular, the life tenant is under an obligation to try to prevent forfeiture of the reversion/remainder and hence is under an obligation to pay the taxes. Even though would have been ok for the daughter to keep the property or sell it to a stranger (in which case the plaintiff would have lost out) giving it back to mother in no equitable. There are 2 equitable maxims:i) Equity looks on that as done which ought to have been doneii) Equity imputes an intention to fulfill an obligationSo, in this case, where the mother should have paid the taxes and preserved for the plaintiff, following the maxims equity imposed a trust on mother to hold the land in trust for the plaintiff, and so the mother will see no advantage in obtaining fee simple title.

c) Comment: the plaintiff could have stepped in at the tax sale and bought the property2) Cannot order partition/sale under Partition Act over objection of consecutive interest: Morris v.

Howe (1982) (Ont. H.C.):a) Facts: applicant (widow) is the sole life tenant of certain lands, to be followed by a fee

simple held by the remainderman. The life tenant wishes to sell the land against the remainderman’s wishes (the life tenant claims, after maintenance and taxes, the land provides her no income). Thus the life tenant seeks an order directing such a sale under the Ontario Partition Act.

b) Decision: Order for sale denied. Although it is possible for a partition to be ordered under the Partition Act in the case of co-ownership (i.e. 2 or more people owning the same thing e.g. concurrent life tenants, co-reversioners, co-remaindermans), it is not possible in the case of consecutive interests as here. Thus a sale cannot be ordered against the wishes of either a life tenant in favour of a remainderman, nor vice-versa as here, since it would defeat the other’s interest. Found that the remainderman’s opposition here was reasonable (wanted farm to remain in the family) but left open the question whether unreasonable opposition might allow an order of sale.

c) Comment: virtual prison sentence for widow. So often better for a testator to use a trust, giving power of sale/lease/etc to trustee to look after best interests of beneficiaries and be able to respond to changing circumstances (such as beneficiaries health, economic situation, etc). Perhaps the widow here should have asked the court to vary the will under Manitoba’s version of the B.C. Wills Variation Act.

3) B.C. Trust and Settlement Variation Act: allows a court to vary or revoke a trust or settlement when there are parties involved who cannot speak for themselves (e.g. infant, unborn, mentally disordered, etc). S.4 says this includes a legal life interest in land (life holder is deemed to hold the land in trust for themselves and for successive holders of the land and Act can apply when beneficiaries are deemed to be incapable of consenting to the arrangement). This might have

been useful in Morris, but only if the court deemed the life holder or remainderman to be incapable of speaking for themselves – seems unlikely in this case.

Aboriginal property

History of aboriginal land title claims in B.C.1) Three ways of viewing aboriginal title:

a) At whim of sovereign: only a moral right to occupy land at whim of sovereign – thus treaties a sham since Indians had no legal interest to give up

b) Only personal rights to hunt, fish, etc. and such rights only surrenderable to the Crownc) Communal ownership like fee simple, surrenderable only to the Crown – this third view

supported, for example, by Royal Proclamation 1763, by the J.C.P.C. in St. Catherine’s Milling 1888, and in 1997 by S.C.C. in Delgamuukw.

2) Early 1850’s: a few treaties by Governor James Douglas on Vancouver island3) 1871: B.C. joins Canada so Indians and their lands fall under federal jurisdiction4) 1887: Nisga’a delegation travel to Victoria demanding treaty but no success5) 1899: Treaty No.8 extended into N.E. B.C. by Feds6) 1900: Decreasing Indian population and increasing immigration create calls to reduce reserves

rather than recognize aboriginal title7) 1909: Legal opinion in Ottawa recognizes aboriginal title as form of ownership. But B.C. giving

out homesteads in Skeena region (Gitksan territory). Federal P.M. Laurier about to challenge this by suing one such holder, but loses election

8) 1916: Allied Indian Tribes of B.C. formed to protest B.C. and feds demand that title claims be dropped

9) 1927: Feds pass law that makes it an offence to raise funds for any Indian for purpose of pursuing clams (unless government consents in writing first)

10) 1951: Ban on land claims activity lifted11) 1960’s: Nisga’a bring suit asking for their title to be recognized – fails12) 1970’s: Calder case splits 3:3 on whether aboriginal title was extinguished prior to 1871. Feds

establish one-claim-at-a-time process with Nisga’a first in line. B.C. continues to claim there never was aboriginal title, or if there was it was extinguished prior to 1871

13) 1980’s: Gitksan and Wet’suwet’en decide cannot wait 10 or 20 years for their turn at negotiations, and decide to sue: Delgamuukw v. The Queen. Lose at trial, but B.C.C.A. holds there was no blanket extinguishment prior to 1871. Meanwhile, as a result of pressure and court cases (e.g. R. v. Sparrow) B.C. changes it’s 120 year policy and agrees to participate in new treaty process

14) 1996: Nisga’a agreement signed in principle15) 1997: Delgamuukw S.C.C. decision

Delgamuukw: reconciliation, content, inherent limits, spectrum, proof, justified infringementDelgamuukw v. British Columbia (1997) (S.C.C.) 1) First time S.C.C. dealt in depth with Aboriginal title. S.C.C. ordered a new trial (since, for

example, oral histories were not adequately considered), but gave lengthy ruling to guide new trial judge.

2) Facts: Gitksan and Wet’suwet’en claim 58,000 km2 in BC. Trial judge did not give independent weight to natives’ oral history their of attachment to the land (since it includes subjective views and myth) and concluded plaintiffs had not proved their historical occupation, hence dismissing claim.

3) S.C.C. considered overriding objective of s.35 to be the reconciliation of prior occupancy by aboriginals with British Crown sovereignty – so throughout decision reference to both aboriginal law/history of particular group (since no universal aboriginal law) and common law, and not exclusively one or the other approach

4) Underlying title to all land in Canada is in the (provincial) Crown (federal Crown in territories), established in conclusively 1846. Aboriginal title exists on top of this as a burden / encumbrance (and this is why it couldn’t have existed until 1846, time of sovereignty, rather than at first contact)

5) Content of aboriginal title:a) Sui generis i.e. in and of itself, not derived from some other doctrine / principle, and a mix

of aboriginal and common law (reflecting overriding objective of reconciliation)b) Inalienability (i.e. can only sell/surrender to federal Crown, although ownership then reverts

to provincial Crown)c) Communal ownership, with decisions about it made communally (unlike individual or

multiple-individual ownership in common law)d) It is a right in land including exclusive use and occupation, and hence is more than just the

right to engage in certain activities. “It confers the right to use land for a variety of activities, not all of which need be aspects of practices, customs and traditions which are integral to the distinctive culture of the aboriginal band”. Thus present day needs can be met. E.g. current uses on reserve land go beyond traditional uses, as the Indian Oil and Gas Act makes clear

e) Inherent limits : however, these activities are limited to ones that are not “irreconcilable with the nature of the attachment to the land”, which will differ from claim to claim. Title comes from previous occupancy and use of land, which forms part of distinctive culture, which should be protected for future aboriginal people. So cannot strip mine lands traditionally used for hunting or ceremonies for example, or pave them over (of course lands can be surrendered to Crown and then so used). Thus no equitable waste (legal waste is when current holder e.g. life tenant goes beyond just taking income and destroys future interest e.g. for remainderman, and equitable waste is similar waste but destroys interest for someone else)

6) S.35 protected rights fall along a spectrum (court rejected Crown argument that the only rights protected were title, and instead preferred notion that title is just one example of protected rights):a) One extreme free-standing right: practices, customs, traditions integral to distinctive culture,

but not sufficient to support title claimb) In middle site-specific right: such activities that by necessity take place on land, perhaps at

specific site, but still not sufficient to support title claim e.g. nomadic people who have seasonal grounds, but not exclusive occupation

c) At other extreme title: aboriginal title i.e. right to the land itself, when land was of central significance to their distinctive culture, activity sufficient to constitute exclusive occupation

7) Proof of aboriginal title:a) The time for identification of aboriginal title is when British Crown asserted sovereignty

over the land i.e. at latest 1846, since prior to that no underlying Crown title on which aboriginal burden could lie, unlike with aboriginal rights when appropriate time is first contact, since afterwards practices sometimes changed.

b) Evidence: SCC said that such oral histories must be considered because these people did not keep written records historically and so it would now be virtually impossible to prove land claims if follow usual rules of evidence i.e. exception to usual rule of hearsay (can’t usually

give evidence on what someone else has told you but rather only on what you have witnessed yourself), again recognizing reconciliation of prior occupancy with sovereignty

c) Proof of occupation: can use both common law which recognizes actual physical occupation, and aboriginal law of particular group might have had some form of land tenure system (allocating land to various people) or land use (showing some pattern of land use). So as proof can use: physical dwellings, cultivation, enclosure of fields, regular use for hunting/fishing/exploiting resources,

d) Continuity : such prior occupation can be next to impossible to prove, so present occupation can be used as proof of prior occupation, so long as there has been:i) A substantial maintenance of connection to land,ii) Even if nature of occupation has changed (but if changed so far as to go beyond inherent

limits then cannot prove continuity), andiii) Making allowances for periods of disruptions (by European settlers for example)

e) Overall test: land must have been of central significance to the groups culture. This means more than incidental – must have been either substantial connection or sufficiently important.

f) For title, at sovereignty occupation must have been exclusive since aboriginal title today means right to exclusive use and occupation (for rights, land must have been an integral part of the distinctive culture of the aboriginal claimants). Proof includes (with equal weight) both common law notion of actual occupancy, and also aboriginal aspects of particular group, such as exclusive control, requiring permission for others to use the land, or by agreement / treaty allowed others onto land. 2 or maybe 3 groups could prove group title by showing they shared exclusivity. If cannot prove exclusivity, multiple groups can still gain shared site-specific aboriginal rights.

8) Aboriginal rights may be infringed by both federal and provincial governments, so long as they satisfy test of justification:a) Infringements must come from a legislative objective that is compelling and substantial,

recognizing that aboriginals are now part of a broader society and attempt at reconciliation of prior occupation with Crown sovereignty

b) Must be consistent with fiduciary obligation of Crown to aboriginal peoples to put their interests first (e.g. with fishing, after conservation measures covered, aboriginal fishing for food should have priority, but aboriginal commercial fishing need not have priority over fishing by non-aboriginals)

c) Fiduciary duty requires at least consultation, if not full consent / involvement in management by aboriginals on land they have title to depending on importance of right, and fair compensation will usually be required.

d) Infringement must infringe as little as possiblee) Allowable infringements to title may include development of agriculture, forestry, mining,

general economic development, protection of environment or endangered species (unclear if this only applies to title, may also apply to rights with no internal limits)

9) Aboriginal rights must have existed in 1982 to be protected by s.35. Because of S.91(24) only the federal government had the power (prior-1982) to extinguish aboriginal title, but they must have done so with a “clear and plain” intent. Thus BC did not have the power of extinguishment after 1871.

10) After ordering new trial, Lamer C.J. recommended negotiations, and ended “Let us face it, we are all here to stay”.

Aboriginal cultural artefacts/chattels, held in museums, seeking return1) Negotiating return of aboriginal cultural artefacts form museums, universities, etc. There are

many open questions to be answered over the coming decades:2) Museum may be unsure who is rightful claimant and fear of suit if give to wrong party e.g.

claims from multiple aboriginal groups, contract with donor to keep artefacts, statutory mandate to preserve and display, did donor have legal right to give/sell artefact to museum

3) Possible conflict of laws if held outside Canada, perhaps requiring bi- or multi- national agreements, which may bring up political problems between countries

4) Preservation may be an issue – if returned, will the artefact be preserved (e.g. if all artefacts returned to Greece, could they house them)

5) How should such artefacts be viewed (recall spectrum from free-standing rights, site-specific rights, to title in Delgamuukw):a) Should ownership of chattels come under title, with inalienability (and notion of underlying

title in Crown, so can only be surrendered to Crown), notion of establishing possession (like occupation of land) at time of sovereignty and showing central significance to the group’s culture. Seen as separate property, the artefacts could be used as pleased, perhaps so long as preserved (as with the inherent limits on land in Delgamuukw)

b) Fixtures blur the line between chattels and land – fixtures are “chattels” that are considered attached to the land and hence part of the land – if artefacts seen this way (perhaps viewed as “attached” to land by aboriginal group) they may become part of land claim. If consider land as a title claim but artefacts as a rights claim, might get tricky.

c) Or should artefacts be seen not as separate objects but as connected with certain aboriginal activities such as song, dance, hunting, ceremony, etc., and hence viewed as cultural/heritage rights (so, for example, time of first contact may be more relevant)

d) Or perhaps even view as human rights.6) Law of intellectual property relevant here:

a) Trademarks and unfair competition – names, logos, “get-up” (i.e. specific shape/decoration), symbols – often used to identify source of supply (e.g. manufacturer) and others then try to use them to cash in on the reputation/goodwill. Perhaps some aboriginal artefacts can be protected as trademarks e.g. one B.C. band in Nanaimo did get some symbols that appear from ancient times on rocks protected by s.9 of the Trademarks Act (also required them to show still using the symbols, which they were on their letterhead), and s.9 protection doesn’t expire like a regular trademark.

b) Copyright for artistic, musical, dramatic and literary works. Perhaps aboriginal drawings, paintings, plays, stories, songs, etc. could be protected. However, copyright law has 3 requirements that make it difficult for aboriginal use:i) Only protects for life of author plus 50 years, after which in the public domain (difficult

to get around, since if ancient then already expired)ii) Based on individual / joint ownership (perhaps Delgamuukw decision on communal

ownership might help here to get copyright for community – for example, in Australia courts gave individual ownership plus a constructive trust in personum to hold for benefit of community)

iii) Fixation required i.e. written down or recorded (perhaps Delgamuukw decision of allowing oral histories based on reconciliation objective may help here)

c) Patent – there is lot’s of action here, such as pharmaceutical companies developing drugs from traditional / aboriginal medicines, plants, seeds, knowledge, etc. Currently no way for aboriginal culture to get part of the profits, although the WIPO (world intellectual property organization) are looking at recognizing this to give share of the royalties (although may

require that medicine etc. be relatively unique to the area, and previously unknown / kept secret)

d) Confidential information – some aboriginal ceremonies are confidential, even to other aboriginals (i.e. only known to particular people e.g. healers)

7) As well as trying to fit into existing intellectual property, might create new branch of intellectual property for cultural interests. There would be many questions, such as would it apply to all communities (e.g. Greeks, Iraq) or just to indigenous peoples? If just indigenous, how identify who exactly? WIPO has been sending people around the world to identify what might be covered, and so there is a potential to list out everything that would be protected. This might include property-like things such as land, tangibles, intangibles (such as songs, stories, music, etc). But property concept seems insufficient for things like ceremonies, body parts (e.g. skeletons in museums), language, spirituality, religious/sacred items. Thus concept of heritage or Human Rights might be better. But how bring principle of exclusivity, present in concept of property, into the concept of human rights (e.g. this is your ceremony and no one else can use it).

Co-ownership – concurrent estates

Co-ownership (unity of poss), TIC (shares), JT (each owns whole + 3 unities + survivorship)1) Applies to realty and personalty where two or more people own the same interest (can have

co-ownership of future as well as present interests). Can be created by grant inter vivos or testamentary, and both in law and in equitya) E.g. “to A & B for lives remainder to C & D in fee simple” (so A and B get present co-

ownership interest, and C and D get future co-ownership)b) E.g. “to X in trust for A & B” (co-beneficiaries)

2) Co-ownership = Unity of Possession = every co-owner has the right to possess the whole (distinguish this from owning the whole). Unity of possession is a present interest which can be dissolved by mutual agreement or by partition (be careful to distinguish this from severance which only applies to joint tenancies and does not destroy co-ownership). When co-ownership destroyed, get severalty i.e. individual ownership

3) Must also be careful to distinguish co-ownership from successive interests (e.g. to A for life then to B)

4) Historically two old types of co-ownership were:a) Tenancy by Entireties: When land was transferred to a husband and wife in circumstances

where, if they had not been married, they would have taken as joint tenants, then took as “tenants by the entireties”. The legal marital unity of the husband and wife meant their title was regarded as single and indivisible, with the survivor taking their property absolutely (i.e. survivorship indestructible with no right to partition). This has been abolished by s.12 of the B.C. Property Law Act.

b) Coparcenary: On intestacy the real property went to the heir of the deceased, usually the eldest son by primogeniture. In the absence of a son the property descended to all the daughters, and if there were more than one the daughters would take the estate jointly as coparceners. Each daughter had the right to possession. This has also been abolished now by the Estate Administration Act

5) Today we have 2 types of co-ownership (be careful to distinguish ownership and possession in the following):a) Tenancy in Common (TIC):

i) Unity of possession (as with all co-ownership) i.e. each entitled to possess the whole of the property

ii) Each only owns a share of the whole (i.e. divided ownership interests), and the shares need not be equal (e.g. 60%-40%)

iii) Each can dispose of their share inter vivos without the consent of the other ownersiv) Each can dispose of their share by will or on intestacy (same as with any other property

owned by the deceased) i.e. there is no survivorship, so upon death passes to estate

b) Joint Tenancy (JT) :i) Unity of possession (as with all co-ownership) i.e. each entitled to possess the whole of

the propertyii) Each owns the whole (equally)iii) Right of survivorship (jus accrescendi) i.e. so long as there has been no antecedent inter-

vivos severance (which would have converted JT to TIC) when one co-owner dies then the number of owners simply decreases (and so the portion of each surviving owner increases, but effectively no change since all surviving joint tenants still all own the whole, just don’t have to share it with so many others). Although if one JT is criminally responsible for the death of the other (e.g. murder) then can’t benefit – interest held in trust by the JT for heir of deceased person. When the penultimate JT dies, the final co-owner becomes the absolute fee simple owner (if last two die together, the B.C. Survivorship Act s.2 says the oldest one is deemed to have dies first, so property will pass to the estate of the younger). Survivorship is a precondition/integral to joint tenancies, so if survivorship is precluded there can be no JT e.g. “to A & B for their joint lives” (meaning only so long as they are both alive) survivorship is impossible therefore no JT, but “to A and B for the life of A” is ok since if B dies first survivorship can operate in one direction (i.e. to A) therefore there is a joint tenancy in this case.

iv) Although a JT can sell inter vivos (although note this destroys unity of title and so severe the JT converting it to a TIC – see below) as a result of survivorship cannot dispose of by will (since as soon as co-owner dies has nothing to dispose of) and any attempt to do so will have no force and effect

Co-ownershipRequires Unity of Possession (i.e. each co-owner has the right to possess the whole)Partition = becomes individual ownership (unity of possession lost)Today TIC and JT, historically also tenancy by entireties and coparcenary

Individual ownership (severalty)

Tenancy in Common (TIC)Ownership: each owns a shareShares may be unequal

Joint tenancy (JT)Each owns the wholeEqual divisionsSurvivorship3 additional unities (title, interest, time)Severance converts to TIC

v) Three additional unities (and if one of these destroyed then the JT is severed and will have a TIC instead)(1) Unity of Title – the co-owners must derive their titles from the same instrument

(transfer or will) e.g. if there are three joint tenants A, B, C created under one instrument, then C sells/transfers their interest to D (i.e. under a different instrument). There will then be a joint tenancy between the original A and B, and together they form a tenancy in common with D. Hence, A and B are joint tenants each with 1/3, and together they form a tenancy in common with D (where A+B hold 2/3 and D holds 1/3)

(2) Unity of Interest – The interests of the joint tenants in the property must be the same in each of the following ways:(a) Quantum – each co-owner’s portion must be equal(b) Duration – each co-owner must hold for the same duration e.g. can’t have one

holding for 10 years and the other for 20 years. (c) Nature/Kind – each co-owner must hold the same kind of estate e.g. can’t have

one holding a leasehold and the other a freehold. Consider “to A & B for lives as JT, then remainder to B in fee simple”. Authorities suggest that if this is set up originally then it is ok, but if B later acquires the remainder then not ok and works a severance (since the doctrine of merger would then apply to add B’s smaller interest into their bigger one, so that A and B no longer hold the same interest).

(3) Unity of Time – applies only to the Common Law (not Equity - when dealing with interests flowing from the use/trust, unity of time doesn’t apply). Interests of the co-owners must vest at the same time. E.g. “To A for life, remainder in fee simple to heirs of B & C upon their turning 21”. If B & C turn 21 on the same day (e.g. have same birthdays or are twins) then this is OK, but otherwise there is no JT. The existence of unity of time does not apply in a transfer to uses or in a gift by will (a joint tenancy will exist as long as the other unities exist)

vi) Severance (converts JT into a TIC):(1) To be a joint tenancy, there had to be the possibility of severance at the time of

creation (2) A JT can be severed by agreement of the JT’s, though a course of dealings where

conduct of parties acting as if TIC, etc.(3) A JT can be severed by breaking one of the 3 additional unities. It can happen

unilaterally and in secret without giving the other co-owners notice (although note this is not allowed in Saskatchewan by statute).(a) E.g. Stonehouse where one of co-owner’s transferred their interest to another

hence breaking unity of title (wife with daughter from a previous marriage was concerned that daughter would not be treated fairly after her death, and so wanted to ensure they were looked after, so transferred her interest secretly without telling her husband – on wife’s death husband thinks that he is getting survivorship, but is surprised to learn he is TIC with the daughter – of course still co-ownership, so husband still had right to possess the whole)

(b) E.g. can transfer to oneself B.C. Property Law Act s.18(4) Because of survivorship, a JT cannot be severed testamentary (i.e. by will) but rather

must be inter-vivos

(5) Recall that if unity of possession is destroyed then do not have severance but rather have partition i.e. lose co-ownership altogether and get severalty (i.e. individual ownership)

vii)By B.C. Company Act s.32 a corporation can be a joint tenant (recognized rise of trustee companies – trustee’s always hold as JT’s so that survivorship applies). By s.32(2) where a corporation is joint tenant of property, on its dissolution the property devolves on the other joint tenant (so that other at least has some chance of survivorship)

Creation: old CL preferred JT, but now lack of unity/words of severance/statute TIC1) In interpreting an instrument, historically a JT was presumed at Common Law if the 3 unities in

addition to the unity of possession were present (this led to some surprises when it was discovered there was a JT and so survivorship would apply and stop someone leaving their property to their heirs by will – thus see the different approach by equity below).

2) Equity disliked the notion of survivorship in JT’s because of the element of chance involved (e.g. who would outlive who, and would parties be aware this was a JT) so preferred TIC’s. Would use two methods:a) Interpretative role – more willing to find an indication of intent for a TIC in a document

(Clarke)b) Substantive equitable remedy role:

i) Even though co-owners may be treated as JT’s in law, equity would operate in a substantive way and require co-owner’s to act in personum as if TIC’s without disturbing the underlying legal JT e.g. if contributed unequally to the purchase price, if partnership, if mortgagees (Robb)

ii) May also treat as TIC’s even though only one name on deed to avoid ousting if both substantially contributed (Bull)

3) With the end of the system of tenures in 1660, common law took on the equities approach. Thus would interpret a document as creating a TIC if:a) One of the 3 additional unities was absent, orb) If all the unities were present, would still create a TIC:

i) With express terms, for example: “To A and B in fee simple as TIC”ii) Or by using words of severance that imply in any way a division of the property into

shares which is antithetical to the imagery of JT, for example:(1) “To A and B in fee simple in equal shares” (Re Bancroft)(2) “To A and B in fee simple” and then in later provision “with equal responsibility for

payment of debts” (Clarke)(3) Other words of severance include between, amongst, each.

iii) Or if could find intention to benefit the extended family of one of co-owners (i.e. implies survivorship would not apply)

4) Now TIC’s are to be presumed by statute for land transfers – see B.C. Property Law Act s.11 below, although leases and personalty still go by rules of common law and equity (Robb)

5) Re Bancroft Eastern Trust Co. v. Calder, (1936) (N.S.S.C.)a) Facts: Testator left a life estate in realty to his wife, the residue of his estate to be converted

into money and invested in two equal shares. The income of one share was to be paid to his wife while the other share’s income was to be divided into four equal shares, one share to each of his three surviving children and the fourth to be paid to the two surviving children of his deceased fourth child (this is “per stirpes” which means by branch in a family tree – i.e. one quarter to each of 4 children, and since one child died with two children, each of those grandchildren get one eighth, as opposed to the 5 surviving children and grandchildren

getting one fifth each). One of the grandchildren has since died, and the question is where that child’s share should now go.

b) Action: between surviving grandchild (who claims JT) and heirs of deceased grandchild (who claim TIC)

c) Decision: The interest was a JT between the two grandchildren, so the money shall be paid to surviving grandchild. In absence of words of severance, the Common Law presumption is that a JT is created. Anything, which in the slightest degree indicates an intention to divide the property (e.g. “equal shares”) will create a TIC. In this case, court had to interpret the will in two separate time periods:i) During life of widow: in this period no words of severance or shares, and since the wife

is not yet dead this is what appliesii) After widow’s death: “upon the death of my wife” there were words of severance (“in

equal shares”) and so the bequest to the children would create a TIC, but the bequest to the grandchildren had no such words.

d) Comment: Another issue was the meaning of the word “issue”. If it meant “children” then a JT would result, but if it meant “lineal descendants” (i.e. includes children grandchildren, great-grandchildren, etc.) then there would have been a TIC. “Issue” is now statutorily defined as “lineal descendants” in Estate Administration Act, even though in common speak it means children. Therefore you must be very careful using “issue”.

6) Clarke v. Clarke, (1890) S.C.C.a) Facts: Testator left his 2 sons a farm and all its chattels. The will also had a clause that

stipulated that sons would jointly and in equal shares pay all of the debts, as well as some legacies. Both sons died. The heirs of the son to die last claimed it was a JT and so they get the whole farm through right of survivorship. The other son’s heirs claim it was a TIC and so they get half of the estate.

b) Decision: Tenancy in common. Although the bequest of the farm had no words of severance, there was a clause which said the brothers should equally pay all debts and this shows an intention by the testator to sever the property i.e. to create a tenancy in common. Found this by the joint conduct of the parties

7) B.C. Property Law Act s.11(2) (applies after April 20, 1891) With the exception of transfers to trustees and personal representatives (i.e. does not apply to property held by trustees) the presumption following a sale of land to two or more persons is for a TIC unless a contrary intention appears (e.g. a reference to survivorship will be taken as intention to JT). S.11(3): Where the interests of the tenants are not stated they are presumed to be equal.a) This principle of TIC unless there is contrary intention only applies to land (and not to leases

or personalty where old common law and equity rules will still apply): s.11 was strictly interpreted in Robb v. Robb (1993) (BCSC):i) Facts: Because the husband’s children from a previous marriage intended to challenge

the will, P sought a declaration that the shares and the leasehold interest were held by her and her husband as joint tenants, and thus passes to her as surviving joint tenant.

ii) Decision: Application allowed. At common law, when real or personal property is granted to two or more persons with no words of severance, the persons are JT’s. The exceptions to that rule recognised by equity are: where purchase is in unequal shares, where property is a mortgage and co-owners are mortgagees, and business partners. Although the P put up the purchase money in this case, it could not be concluded that the parties contributed in unequal shares in light of the fact that the husband subsequently conveyed other property to P in consideration. The situation was unaffected by s.11(1) of

the Property Law Act – that provision cannot be interpreted as applying to an assignment of lease.

iii) Comment: As mentioned, mortgage relationships were also seen as incompatible with survivorship (i.e. with JT’s). When 2 or more people lend money on the security of a mortgage of land and as a part of this mortgage the borrower transferred the land to the lenders, the lenders held legally as JT’s, but if one of the mortgagees died equity would compel the surviving JT to hold the legal title on trust for the deceased’s estate so that the estate would not lose its security for the repayment of the loan

8) B.C. Partnership Act s.25 recognizing that Equity regarded survivorship as incompatible with partnership, partnership land is viewed as a tenancy in common: Where land or any other heritable interest has become partnership property, it shall, unless a contrary intention appears, be treated between partners as personal property and not as a real or heritable estate.

9) Bull v. Bull, (1955) C.A.a) Facts: son (P) and his mother (D) jointly purchased a home for themselves with P paying

greater portion of the price. P put as sole owner on deed. After a family dispute P asked D to leave.

b) Decision: The court applied a tenancy in common as an equitable remedy so the that son had no right to turn mother out. Where 2 people are in possession of a property to which they have both substantially contributed, and there is a clear intention that both should have possession, even though only one name appears on the deed they are equitable tenants in common. Neither one can oust the other as they are entitled to concurrent possession, use, and enjoyment of the land. When land sold, each will be reimbursed according to their contribution.

c) Comment: Note the interpretation approach of Equity. Further, Equity will impose in personam obligations in certain specific circumstances to ensure that a just result follows

10) B.C. Property Law Act s.18 Rules for transfer and ownership to oneself (IMPORTANT TO MEMORIZE)a) At common law it was not possible to transfer an interest to oneself. E.g. if A was a fee

simple owner, s/he could not transfer to themselves and B making them co-owners of the property – now can by s.18(4)

b) s.18(1): A person may transfer land to himself in the same manner as to another person, and a JT may transfer his interest in land to himself

c) s.18(2): A trustee or personal representative may transfer land to himself in his personal capacity

d) s.18(3): A transfer by a JT to himself of his interest in land, whether in fee simple or by a charge, has and shall be deemed always to have had the same effect of severing the joint tenancy as a transfer to a stranger (i.e. allows you to sever secretly by transferring to yourself (recall if originally 3 JT’s A,B,C and if A transfers to self then B,C remain JT’s with 1/3 each and survivorship applying between B and C, and B+C combined is a 2/3 TIC with A) but note this was not allowed by old common law rules of “livery of seisin” and today is not allowed in Saskatchewan by statute)

e) s.18(4): A registered owner may make a transfer directly to himself jointly with another (e.g. A transfers to A and B as JT’s or TIC’s) and registered owners may make a direct transfer to one or more of their number either alone or jointly with another

11) B.C. Land Titles Act:a) s.173 Several persons interested in registration: The registrar may effect registration of the

fee simple at the insistence of one or more co-owners of a JT or TIC

b) s.177 Registration of Joint tenants: Where, on the registration of the title to land under an instrument or document, two or more persons are JT’s, the registrar shall enter in the register following the names, addresses and occupation of those persons, the words “joint tenants”.

Relations between co-owners: can ask to account if unfairly sharing profits, but not for labour1) Recall that the principle of equitable waste can apply between JT’s and TIC’s2) The old Common law rule of no obligation to give a statement of accounts was changed by

Statute of Anne 1705. e.g. pure rents should be divided equally between JT’s or according to shares of TIC’s (or equally if an equitable TIC was imposed)

3) Spelman v. Spelman, (1944) (B.C.C.A.)a) Facts: P & D owned two properties as JT’s and lived together for many years running a

rooming house. P left for 6 years and upon return demanded account of rents and profits so that she could sue for occupational rents (husband was running a bed and breakfast).

b) Decision: Order for accounts failed.i) When one co-tenant has been an exclusive occupier but there has been no agreement or

ouster (e.g. one co-tenant changing the locks or a “constructive ouster” where one co-tenant makes living conditions so bad it is next to impossible for the other tenant to stay) the co-tenant who has exclusively occupied is not liable to pay occupation rent to the others because s/he has a perfect right to be there by unity of possession (especially when the other person just walks away)

ii) When one tenant is receiving a return for his own labour and capital he is not receiving more than his just share, and his co-tenant has no right to it (only fair since consider the reverse situation where a tenant makes couldn’t ask co-tenant to pay a share of a loss). I.e. other owners are not entitled to products of your labour

iii) In the absence of a contract (i.e. between tenants to share profits) or ouster, there is no obligation to account for profits.

c) Comment: Probably can differentiate between pure rent (e.g. obtained from a rental suite jointly owned) and payment for services (as in this case where one co-tenant provides the labour but both own). Note court could have tried to split up the profits as part coming from the jointly owned dwelling space (which perhaps could have been shared with P) and other part coming from D’s personal labour and capital expenditures. Could did not do this since it was hard to divide up the profit and lots of effort and money had been put into the business by D, and so although it was using joint space the court treated the whole problem as an industry (perhaps with modern accounting techniques such a division could be made to determine an amount for P)

d) The accounting provided for in the Statute of Anne 1705 is now in the Estate Administration Act s.71 where a co-owner can bring an action to account against another JT or TIC to determine if they have been receiving more than their just share or proportion of the profits.

Expenses: common obligation & at request & option adopted v. no option/equity on partition1) At common law, owners could not compel other co-owners to pay cost of repairs or recover

voluntary expenses2) The B.C. Property Law Act (noted in Bernard v. Bernard to only be procedural and not add any

new substantive law) on common obligation expenses:a) s.13: When a co-owner has to pay more that his proportionate share of mortgage, money,

rent, interest, taxes, insurance, repairs because of default of another registered owner, he can apply for relief under s.14.

b) s.14: Under application of s.13 the court may order a lien or sale on the defaulting owner’s interest. The applicant may purchase the defaulting owners interest in the case of a sale.

3) Mastron v. Cotton (1926) (Ont. App. Div.)a) Decision:

i) When a JT is terminated by the court for partition or sale, the court may make all just allowances to do complete equity between the parties.

ii) Thus on partition and claim for expenses one tenant may be awarded an allowance for paying more than his proportion of the repairs (providing they increased the capital value) and the maintenance of the property

iii) If you are claiming repairs and expenses, then you may also have to pay occupation rentiv) If one tenant has made improvements which have increased the value of the property, the

other tenant cannot take advantage of the increased price without submitting to an allowance for them

v) Where one tenant has paid more than his share of the encumbrances he is entitled to an allowance for such surplus

4) Leigh v. Dickeson (1884) (C.A.)a) Facts: P is claiming occupation rents from D. P held in trust a 3/4 interest in a TIC for X. X

leased her interest to D for 21 years. D then purchased the other 1/4 interest and thus became a TIC with P. The lease expired and D continued to live in the dwelling. There was some correspondence between the parties about continuing the lease, but P wanted the rents in advance, which D refused, so nothing more came of it at that point. P sues for rents and D counterclaims for repairs and improvements that he made since the lease’s expiration.

b) Issue: is one TIC liable to another for the costs of repairs, and can one TIC charge another for rent?

c) Decision: Judgement for P on both claim and counter-claim. On the matter of expenses (D’s counter-claim) division of types of expenses (for repairs, improvements, etc):i) Expenses for which there is a common obligation on all co-owners (e.g. payment of

mortgage or taxes). All co-owners must pay, so there can be immediately recovery of such an expense – now written into statute in s.13 and s.14 of Property Law Act (and see Bernard v. Bernard which said these section didn’t add anything substantive, just procedural)

ii) Expenses with no common obligation:(1) If made by one co-owner at request of the other co-owner: can be recovered

immediately based on notions of implied agency, promise, or from business practices(2) If not made at request of other co-owner i.e. a voluntary expenditure:

(a) If an option was given to the other co-owner to adopt (usually where an expenditure benefits all co-owners):(i) if adopted by other co-owner then can be recovered immediately, but(ii) if rejected by other co-owner then no contribution can be recovered

(b) If no option was given then at common law there is no recovery of a contribution (i.e. a TIC cannot charge another for cost of voluntary repairs/improvements if they didn’t give the other the option as to whether to do ahead with them so long as the property is enjoyed in common). However, by equity on partition, if expenses increased the value of the property then at Equity a contribution can be recovered since would be unjust for the other party to benefit from the increase in price without having contributed to those expenses. This was the situation in this case: D gave P no option as to whether she wanted the repairs/improvements

performed, and therefore there is no remedy for D at this time (although there could be on partition).

5) Bernard v. Bernard, (1987) B.C.S.C.a) Facts: The husband (D) and wife (P) are settling a JT and want to know who owes what to

whom with regard to occupation rents, percentage of partition, etc. The wife has been living in the property and paying the mortgage and taxes (and wants an order for partition/sale) whereas the husband has been living away for 6 years. She says he left voluntarily whereas he claims it was constructive ouster. Action brought pursuant to s.13 and s.14 of the Property Law Act.

b) Decision: Order for sale granted and no need for wife to pay occupation rent.i) The divorce turned ownership from a JT to a TIC in equal shares (any claims based on

unequal contributions before the divorce should have been made within limitation period of two years of the divorce order).

ii) Sections 13 & 14 of the Property Law Act are merely procedural, and they do not create any new obligations beyond the common law.

iii) The duty to share expenses arises from the shared liability of the co-owners at common law, and an absent co-owner has no right to claim compensation from the sole occupying owner (except where ousted or expressly taken to act as his bailiff)

iv) The Statute of Anne 1705 provided that absent owners have the right to a share of rents and profits (now in s.71 Estate Administration Act). However, this section only applies to rents actually received from third parties, and imposes no duty or right for charging rents by either owner on the property

v) Except in an ouster or express bailiff, there is no right to charge an exclusively occupying co-owner with occupation rent (each co-owner is entitled to occupation of the whole – recall Spelman). However, if on a partition action (again except in ouster and bailiff cases) an occupying owner claims an allowance for their expenses then under equity on partition they will be liable for occupation rent (i.e. a fee for their exclusive occupation is levied against the claimed expenses). This rule should apply in an application for sale under s. 14

c) Comment: this latter liability for occupation rent on partition if claim expenses seems fair if the expenses were not a common obligation (i.e. the person occupying didn’t need to make those expenses) but it seems less fair if the expenses were a common obligation (since the absent party is obligated to pay them, so why should an occupation rent relieve that absent party). Nevertheless, that was the decision.

Severance overview: destroy unity, mutual agreement (express or implied), other unilateral?1) Severance converts a JT to a TIC (distinguish this from partition which destroys unity of

possession and so destroys co-ownership altogether, leading to individual ownership). Survivorship (which applies to JT but not TIC) will therefore only apply if there has been no antecedent severance. The issue in many of these cases is whether the property goes to the deceased’s heirs (TIC) or whether it stays with the other co-owners (JT).

2) 3 possible ways (or 4 if classify differently):a) Destruction of one of the 3 additional unities (by unilateral action of one JT). The focus is

on the consequence of the action (i.e. was one of the 3 additional unities destroyed) and so intent is not directly relevant.i) Most commonly it is the unity of title that is destroyed e.g. by a transfer of legal title at

law to self or another (even if secret and unregistered – so actual conveyance didn’t

occur – but deed must be signed, sealed and delivered) or by a trust at Equity (transferring legal title to third party trustee)

ii) Can also sever without destruction of a unity by creation of a trust at Equity where trustee is yourself (so no movement in legal title)

iii) There is no severance by adding a charge/encumbrance however, such as an agreement for sale and purchase or a mortgage (although law somewhat uncertain on mortgages in B.C.).

iv) There is no severance by a unilateral declaration by one party of an intention to sever, nor by execution of divorce settlement (if parties act as if still JT), nor by a will (unless cross-wills or mutual wills with intention to treat as TIC)

v) If one JT leases out their interest it is uncertain if severs since authorities divided – likely that no severance if survivorship is not lost

b) Mutual agreement between joint tenants to sever, either expressed, or implied by a course of conduct/dealings where all co-owners act as if TIC (some classify express and implied separately so leading to 4 categories of severance). The focus here is on the parties intenti) There will be a severance if all the parties acted as though their interests were a mutual

TIC i.e. an implied mutual agreement (Flannigan v. Wotherspoon). Note must be mutual – a mere intention declared by one JT (e.g. by application for partition) is not sufficient for severance (Munroe v. Carlson).

ii) A sufficient agreement is if the joint tenants agree to divide the property in specie, or to sell and divide the proceeds of the sale, or if one joint tenant decides to sell his/her interest to another. In such cases severance occurs on the making of the agreement, even if one of the parties dies before the agreement is given effect, because it sufficiently indicates a mutual intention to sever

iii) Recall can’t sever by a will, since wills have no effect until you die, and this is too late to sever since survivorship has already occurred at the moment of death. However, a “joint” or “mutual” will can sever the JT since it provides for a distribution of property upon death, which is inconsistent with the rights of survivorship in a JT, and so shows a mutual intention to sever (Re: Sorenson and Sorenson)

iv) Simply receiving and dividing rents is not enough to sever, nor an agreement by all of the joint tenants to sell to a third party in itself enough to sever

c) Unilateral action of one JT that falls short of breaking one of the three additional unities. The focus here is on whether this action is sufficient to sever. Likely applicable in the UK, but there are two B.C.C.A. and one Alberta C.A. decisions that say a unilateral action of one JT that falls short of breaking one of the three additional unities does not sever, so, subject to a ruling by the S.C.C. preferring the UK approach, this method of severance does not apply in Canada.i) Yes – correspondence between the JT’s showed that each was treating his share as a

tenancy in common, hence severance (Ginn v. Armstrong, B.C.S.C., rejected by B.C.C.A. on other grounds)

ii) No – a unilateral declaration to sever (e.g. commencement of a partition action) does not sever because does not effect any of the unities and the party who began the action can abandon it (Munroe v. Carlson)

iii) No – in B.C. a unilateral declaration of intent to sever does not sever, regardless of whether notice has been given to other JT’s, unless intent is not carried through all the way to actually break one of the unities (Walker v. Dubord)

iv) No – unilateral declaration to sever without any other act or acceptance by others is not sufficient (Re: Sorenson and Sorenson)

Destroy unity: transfer/trust yes, mortgage/lease/divorce?, agree to sell/will/uni declaration no1) The first way a severance can occur (and so a JT is converted to a TIC with no survivorship) is

by destruction of one of the 3 additional unities2) Recall by B.C. Property Law Act s.18(3) a JT may transfer his interest in land to himself severs

a JT since unity of title destroyed, and this can be done secretly.3) Similarly, a secret transfer to a third party will sever: Stonehouse v. A.G. of B.C., (1963) S.C.C.

a) Facts: the plaintiff husband and his wife were registered owners in JT of land. Without telling her husband, the wife conveyed her interest in the property to her daughter, inter vivos (she did not want survivorship to apply, but did not want to tell her husband since concerned about whether children from a previous marriage would be fairly looked after on her death). The wife died 3 years later, and the husband thought that he had gained complete title through survivorship. However, the daughter registered her deed the day after the wife’s death (so three years after it was executed) and registrar accepted this, at which time the husband became aware of it. The plaintiff husband claims the registrar should not have registered the 3-year old deed since the wife grantor was dead.

b) Decision. Although the estate does not actually pass to the transferee (i.e. daughter) until the transfer deed is registered, severance of the JT occurs on execution/delivery of the unregistered deed (i.e. 3 years ago) since unity of title was destroyed at that time by the different instrument (thus any questions as to how the title was registered are irrelevant for determination of severance). Thus once the mother executed the document she was bound by it, registered or not, causing the severance and so changing the interest of the remaining JT (the husband) to one of TIC, and so his right to survivorship was lost. Note that by B.C. Land Registry Act the person who signs/seals/delivers a transfer cannot then rely on it not being registered as a shield to claim the transfer is invalid, although 3rd parties can (this is different to Australia where it is not valid at all till registered).

c) Comment:i) Note the key focus here is on the effect (i.e. was on of the unities destroyed).ii) The husband argued that part of his interest had been passed to the daughter and

therefore the transfer was illegal since he did not consent. However, on severance his right to survivorship ended, and so no part of his interest was transferred.

iii) Further, it is irrelevant that the husband didn’t realize that there had been a severance (and so his interest had converted from JT to TIC), since a secret transfer without registration performed inter vivos is severance in B.C., although not registering runs the risk that a third party might register and get the indefeasibility (cannot do severance secretly by will since survivorship kicks in immediately on death). So in B.C. a JT should realize may or may not get survivorship

iv) It is a policy question as to whether this should be allowed. Could insist that there is no severance unless the transfer is registered. In Saskatchewan a severance must be registered and requires the written consent of the other joint tenants, where it is claimed that this avoids unfair surprise and ensures that all dealings are open (although of course in other jurisdictions such as B.C. when a JT is granted it is done with the knowledge that it can be unilaterally severed by destroying one of the unities)

4) Mortgages:a) At common law there is a conveyance (i.e. alienation) of legal title from mortgagor (i.e.

owner/borrower who gives the mortgage) to mortgagee (i.e. bank/lender) subject to an equity of redemption i.e. equity would protect the redemption (transfer of title back to the mortgagor) so mortgagee couldn’t treat the property as their own since it’s just security, and could only take/sell the property after foreclosure (couldn’t put any other blocks on

redemption called “clogs on equity of redemption” i.e. once a mortgage, always a mortgage). Thus a mortgage severed a JT since unity of title broken, and when title was eventually conveyed back the JT was not revived.

b) In Torrens jurisdictions, however, the situation is generally different as shown by the Australian case Lyons v. Lyons, (1967) (S.C. Vict. Australia)i) Facts: The Lyons were owners in JT of land. Husband granted a mortgage of all his

estate and interest in the land. After he died, the mortgage was registered.ii) Issue: Did the mortgage sever the joint tenancy under Victoria Lawiii) Decision: should follow 3 steps to determine if there has been a severance:

(1) First, must analyse the “juristic” nature of the event i.e. what is the legal perspective – was it a transfer or simply a charge. In this case: under the Torrens System mortgages do not convey title to the mortgagee, but rather the mortgage acts as a charge (i.e. an encumbrance) on the title to secure the promise (covenant) to pay, and so legal title remains with the mortgagor. Therefore, since only a charge on the JT’s (i.e. the mortgagors) interest, the mortgage dies with the mortgagor (and so the mortgagee loses out – but suppose that the wife had died first, in which case the husband’s interest would have increased to full title, and the mortgage would remain but now with security of the whole property)

(2) Second, apply the rule that a JT is severed on loss of any of the 3 additional unities, but not severed if they aren’t affected. In this case, under Torrens system a mortgage is only a charge and so does not destroy any of the unities, therefore no severance

(3) Note are not concerned with intention of parties, but only the result/consequences of the transaction are relevant (i.e. is a unity destroyed).

c) However, the situation is not so clear in B.C. The B.C. Land Registry Act refers to a mortgage as a “charge”, but unlike other Torrens jurisdictions, we do not have legislation that allows for this charge to be converted on foreclosure and the property sold. So, at least when considering foreclosure, must continue to think of mortgages in B.C. as having transferred title according to the old common law: North Vancouver v. Carlisle, (1922) B.C.C.A.i) Facts: Not concerned with joint tenancies, but rather involved foreclosure proceedings

on a mortgage.ii) Issue: does the B.C. Land Registry Act, s. 2(1) state that the legal estate no longer

passes to the mortgagee under a mortgage (as it would under common law)iii) Decision: unclear:

(1) One judge said by mortgage the legal title passes to the mortgagee subject to an equity of redemption in the mortgagor i.e. the common law approach of conveyance on mortgage remains, unaffected by the B.C. Land Registry Act (i.e. the Torrens system).

(2) Another judge said a mortgage is just a chargeiv) Comment:

(1) One judge seems to overrule Lyons here in B.C., suggesting that the common law position of severance on mortgage applies unchanged by the B.C. Land Registry Act, and further it could be argued that to recover a security in B.C. one must rely on foreclosure so should not only consider a transfer to have taken place when actually foreclosing.

(2) But could be read narrowly (according to other judge) to refer only to cases involving foreclosure (i.e. should only consider a mortgage to have transferred title when an actual foreclosure is proceeding) and otherwise the B.C. Land Registry Act,

which refers to a mortgage as a “charge” against property, should prevail and so a mortgage does not work a severance, following Lyons. The unreported case Bank of Montreal is a weak authority for this approach, and this approach is most likely.

(3) Similarly with the issue of whether the mortgage dies with the mortgagor – Lyons says that it does, or can argue the common law conveyance approach that the mortgage severed the JT

(4) So, in discussing these issue must describe the common law position, the two cases, and the Land Registry Act treatment of a mortgage as a “charge”.

5) Trusts (i.e. moving from common law to Equity): Public Trustee v. Mee, (1972) B.C.C.A.a) Facts: Defendant ex-wife and her ex-husband were joint tenants. After the divorce, but

before ex-husband’s death, he declared a trust for his infant son, with himself as the trustee (therefore legal title did not move). The trust was never registered and the son could not take title until he reached 21. On ex-husband’s death, ex-wife claims title through the right of survivorship.

b) Issue: Certainly transferring legal title to another as trustee would break unity of title and hence work a severance. But what about when make yourself the trustee (so no change in legal title and so unity of title not broken).

c) Decision: A valid declaration of a trust that is completely constituted (i.e. complied with trust law’s 3 certainties as to intent, beneficiary and what property is being conveyed, which generally cannot be revoked except in the case of fraud, fundamental mistake, or duress, or if power of revocation is included), even if not registered, and even if to self as trustee for benefit of another (so unity of title not broken), is inconsistent with the maintenance of a JT and so effectively severs the JT to the same extent that a direct transfer to a person would sever. However, if the trust is not completely constituted (i.e. not it perfect and voluntary) Equity will not enforce an imperfect gift.

d) Comment: This is similar to Stonehouse (where there was a binding transfer in law) – here there was a binding transfer of benefit by trust in Equity. The key feature is that the husband had bound himself by the trust instrument to carry out its terms i.e. there was certainty as to the property transferred, the trust was irrevocable, and it was properly executed to make it binding. Therefore equity held that the benefit of the property was no longer the ex-husband’s. Recall also Ziff’s warning that to create a trust really should have double use/trust words (with only one flirting with the Statute of Uses)

6) Foort v. Chapman, (1973) B.C.S.C.a) Facts: Mother conveyed her fee simple interest to herself and her sister (defendant) as joint

tenants, expressly agreeing that the survivor would get all. Without informing the sister, the mother entered into an agreement for sale and purchase with her son (plaintiff) and registered this agreement (an agreement for sale and purchase is where the seller is paid off over a period of years, during which it is registered as a charge, and when paid in full the purchaser can execute it i.e. ask for conveyance of the property which a court would enforce i.e. seller is like a lender and the buyer is protected by the charge). The son never paid anything, and although the mother released the son from all obligations to make payments under the agreement she died before conveying the property to him. Thus the agreement remained only a charge against the title to the property. After the mother’s death, the son tried to have 1/2 interest registered in his name as executor, but registrar refused.

b) Issue: did the agreement for sale and purchase sever the joint tenancyc) Decision: An agreement for sale and purchase is not an actual conveyance but rather only a

change/encumbrance on the mother’s title and so does not affect the unity of title, and so

does not sever the JT until it is executed. Therefore by the time the son wanted to register his agreement the property had already gone by right of survivorship to the sister.

d) Comment:i) Since mother had forgiven son’s debt, might think Equity would come to his aid and say,

even though no conveyance that the son had effectively gained equitable ownership. But Equity tends to only come to the aid of those bona fide and for value i.e. not volunteer’s (i.e. gifts as here). Thus if the son had given consideration then he might have got the half interest.

ii) However, if had found a severance, because of the contract between the sister’s promising survivorship to each other, the court said it would have applied Bull v. Bull (where an equitable TIC was applied to stop a son turning his mother out)

iii) In finding no severance (which is correct) court incorrectly cited Flannigan v. Wotherspoon as authority for this (in Flannigan the JT’s mutually agreed to enter into a transaction with a third party, unlike here where only one of the JT’s agreed to the sale)

7) There are 4 ways a gift can be made from a donor to a donee:a) by transfer, conveyance or delivery of the property to the doneeb) by transferring, conveying or delivering the property to a 3rd party as trustee for the doneec) by the donor declaring themselves a trustee of the property for the doneed) by willAll but the second were tried in Re: Sorenson and Sorenson, (1977) (Alta. App. Div.)e) Facts: The divorced Sorensens were joint tenants of three properties. The wife found out

that she was dying, and wanted to sever in order to provide an estate for her disabled son. She tried to work a severance through a number of means:i) The execution of their divorce agreementii) A devise of everything she owned to her son in her williii) She commenced an action for partition, but she died the morning of the partition hearingiv) A declaration of a trust deed for her son

f) Decision: The onus of proof that there was a severance is on the one who asserts it. This case nicely summarized ways to sever by unilateral action, and only the declaration of a trust severed here:i) The execution of the divorce settlement didn’t amount to partition in this case because

the wife later acted as if it hadn’t by filing for partitionii) The execution of a will does not sever since survivorship will have already occurred

(unless cross-wills i.e. JT’s mutually leave the property to each other indicating a common intention to treat as a TIC)

iii) A unilateral declaration by one party of an intention to sever that falls short of destroying one of the 3 additional unities, without any other act, and without acceptance by the other joint tenants, does not sever. So the commencement of an act of partition is evidence of intention alone and does not sever (the party who commenced the action still has the choice of abandoning the action).

iv) The declaration of a trust by a joint tenant (even with themselves as the trustee so they keep legal title subject to an equitable gift to the beneficiary) severs a joint tenancy (as in Public Trustee v. Mee)

v) The granting of a lease by the husband of his interest to the wife for life didn’t create a severance here because it was only for life and since wife died first survivorship returned to husband (note this is problematic and could argue this lease was really a contractual license, since it is of uncertain duration whereas a lease should be certain since it is a non-freehold estate)

(1) Thus the question of whether one JT granting a lease can sever was dodged in this case and remains unresolved. Although a lease gives a right of possession by a different instrument, it doesn’t transfer legal title (which is what unity of title is all about). Some authorities say a lease only a charge/encumbrance on an estate, others say it does sever.

(2) Suggestion that no severance so long as survivorship not lost i.e. in this case if the life holder predeceases the joint tenant then the right of survivorship is revived upon his death so no severance, but if the joint tenant predeceases the life holder then severance occurs and it becomes a TIC

vi) The mortgage does not sever.vii)Signed, sealed but not delivered transfer did not sever.

Severance by mutual agreement – express or implied by course of dealings/actions as if TIC1) The second method of severance is by mutual agreement, either express or implied (i.e. by

inference made from the actions of all the co-owners). Emphasis here therefore is on mutual intentions, and so must focus on the facts of the case.

2) Flannigan v. Witherspoon, (1953) B.C.S.C.a) Facts: two brothers (defendant D and B) were joint tenants of several lots. They entered into

an agreement for sale and purchase to a 3rd Party (i.e. a charge as in Foort v. Chapman), and the proceeds (i.e. the money from the sale) was be equally divided and deposited in each brother’s bank account. Brother B died and left all his real and personal property to his daughter (plaintiff). On his deathbed, B told her that the proceeds from the land would be hers, and brother D heard this and made no opposition. Brother D also later talked to the daughter as if the brothers were TIC’s. The daughter claims therefore that there was an implied severance by mutual agreement and so she should inherit the proceeds that were going to B, whereas brother D claims still a JT so by survivorship all the proceeds should now go to him.

b) Decision: Judgement for the daughter. A course of dealings, which indicates a mutual agreement to sever, will do so. It is sufficient for the parties to act as though the interest was a tenancy in common i.e. that they had separate shares (they do not need to know the law). To determine this must look at the facts of the particular case. Here:i) Although the sale did not in itself effect a severance (it only changed the specie i.e. the

form of JT interest from land to money). Further, dividing the proceeds equally was not a severance on it’s own (since would be equal under a JT) but having it deposited in two separate bank provided good evidence for a severance i.e. treating the proceeds as going to each other’s estate separately.

ii) Brother’s words suggested daughter would inherit and so TIC:(1) Brother B said “so neither of us has anything to worry about”, which implied B had

no need to worry about his daughter (i.e. that she would inherit), which implied the brothers were thinking in terms of shares (i.e. TIC)

(2) Brother D’s statement to the daughter that on her father’s death she would be 1/2 owner was clear evidence of the mutual agreement to sever

iii) The silence of D when he heard about the will, while not proof, was perhaps indicative of the intention to treat as a TIC, although given the circumstances was fairly weak evidence for a severance

Severance by unilateral act that falls short of breaking a unity – likely in UK, unlikely in B.C.1) The final method for severance (in the UK but apparently not here) is by unilateral actions that

fall short of breaking a unity e.g. a statement of intent or notice given by one of the JT’s to the others. The Canadian case law show this is not available in Canada.

2) English law is different:a) England has it’s Law of Property Act 1925 (which has not been adopted outside the UK)

which says that all co-ownership is JT at law, and the issue of JT v. TIC is settled at equity. Thus since 1925 there has been no legal severance, but rather only equitable severance for both realty and personalty joint tenancies.

b) The statute allows realty or personalty JT’s to sever in equity by merely giving notice to the other parties

c) Statute also appears to suggest that previously to it’s enactment (1925), at common law could have severed JT personalty by simply giving notice (the statute says it is now allowing this for land as well). Although there was no English common law authority actually showing could sever personalty in this way, it did raise the possibility that at common law there was a difference in rules of severance between realty and personalty joint tenancies over unilateral actions. This has not been accepted in Canada – see Walker v. Dubord, which said that a unilateral intention by one party (not amounting to destruction of a unity) could not sever personalty nor realty

3) Ginn v. Armstrong, (1969) B.C.S.C.a) Facts: plaintiff wife and deceased husband (defendant estate) were joint tenants in their

matrimonial home. In the course of divorce proceedings, they corresponded by mail and agreed to sever. Wife now claims rights of survivorship

b) Decision: The postal correspondence between the JT’s showed each was treating their share as a TIC, and the fact that the wife showed an intention to sell the house and split the profits (which is totally inconsistent with a Joint Tenancy) showed there was a severance, and therefore no survivorship. The court focused on the intentions of the parties but it was unclear whether the court was talking about intention by one or both parties (refers to “her” intent at some times (i.e. unilateral) but to “their” (i.e. mutual) intent at other times)

c) Comment: This case has been interpreted as saying yes, can sever by statement of intent of delivered notice.i) The B.C.C.A. in Tomkins Estate v. Tompkins refered to this case as an authority on

mutual intent.ii) Uncertainty remained until the B.C.C.A. in Walker v. Dubord said this case is not really

unilateral, but rather is about mutual intent (and so there is no conflict of authority in B.C.)

4) Munroe v. Carlson, (1976) B.C.S.C.a) Facts: Wife (defendant) and deceased husband (plaintiff estate) were JT’s of matrimonial

home. During marriage breakdown, and without consulting his wife, the husband listed the home for sale. The wife told the would-be purchasers that the home was a JT and that she was not willing to sell her share. In an attempt to bring her husband to his senses, the wife filed for divorce and partition of property. The partition application was not heard before the husband’s death, and was discontinued a week after his death. She then claimed survivorship.

b) Issue: Does starting a partition action effect a severancec) Decision: A unilateral declaration to sever, such as the commencement of a partition action,

which has not been heard and so can be abandoned (as occurred here), does not sever because it doesn’t destroy any of the unities.

d) Comment: the court declined to follow English authorities which said unilateral notice of intention to sever (such as partition action) does sever (see English Law of Property Act 1925 above)

5) Walker v. Dubord (1992) (B.C.C.A.)a) Facts: husband (plaintiff) and deceased wife were JT’s. Shortly before wife died, she

transferred the JT land to herself, and attempted to sever her JT in personalty by a unilateral declaration (investment certificates and bonds).

b) Issue: concerned both realty and personalty, so addressed the question of whether there is a separate rule over severance by a unilateral action (that doesn’t destroy a unity) for personalty as opposed to realty (as suggested by the English

c) Decision: held for the husband:i) Clearly there was a severance of the land (the wife had transferred the land to herself –

recall s.18 of the B.C. Property Law Act)ii) The JT in personalty (the bonds and investment certificates) had not been severed simply

by her unilateral declaration since it did not destroy one of the unities i.e. her statements in the letter which effectively said to treat the personalty as TIC (she could have transferred this personalty to herself, which would have severed, but she did not)

iii) In B.C. a unilateral (e.g. written) declaration of intent to sever, even if notice was given to other JT’s, does not sever unless carried through all the way.

iv) The rules for realty and personalty JT’s do not differ at common law in Canada (despite the suggestion in the English Law of Property Act 1925)

6) Recall from above Re: Sorenson and Sorenson, (1977) (Alta. App. Div.) which said, after reviewing the authorities, a unilateral action (short of destruction of a unity) such as an application for partition in equity cannot sever

Partition and sale: history and the B.C. Partition of Property Act1) Partition = where one co-owner wants to sever but other(s) do not, so must go to court to break

co-ownership. Not just talking severance by breaking one of the 3 additional JT unities here (which converts to TIC but does not destroy co-ownership), but rather talking about destruction of the unity of possession so destroys co-ownership completely, and applies to both JT and TIC. Ex-co-owners then become owners in severalty (i.e. individual ownership)

2) At common law, there was no way to partition other than through mutual agreement, but statutes in 1500’s created a writ of partition

3) The English Real Property Limitation Act, 1833.a) Abolished the Common Law writ to order a partition.b) However, the courts of equity assumed the independent power to decree a partition and this

power was exercised even after the Common Law writ was abolished, and it remains today4) The English Partition Act, 1868

a) Empowered the court to order a partition and saleb) British Columbia adopted this Act in 1880: the B.C. Partition of Property Actc) Therefore, may bring action under the statute (for land only, not personalty) or the courts of

equity (applies to personalty)5) B.C. Partition of Property Act

a) s.2 (describes who can be subject to an order of partition, court has discretionary power to order partition for land): All JT’s, TIC’s, mortgagees, creditors or other parties having liens on any property may be compelled (note discretionary) to suffer a sale or (physical) partition of the land. A partition may be had whether the estate is legal or equitable (note must go to equity for action in personalty which has developed the sale idea – can’t cut a horse in half!)

b) s.3: Proceedings for a partition can include a sale and distribution of the proceedsc) s.4: (most important section since it describes who can seek an order of partition i.e. only

those with a right to possession) Any person who, if this act had not been passed, might have maintained an action for partition may maintain such action against any one or more of the parties interested without serving the other or others (if any) of those parties.

d) ss.6-8: Deal with sale rather than physical partition (note that equity has not yet replicated these ideas for personalty):i) s.6: if applicant owns 1/2 or more of property and requests sale (rather than division of

the property), then the court “must” order sale (unless good reason not to)ii) s.7: but if less 1/2 then the court “may” order sale if sale is requestediii) s.8: if the court thinks fit parties can be bought out by other tenants

Only those with right of possession may seek partition (e.g. not creditors, remainderman, etc)1) Morrow v. Eakin and Eakin, (1953) B.C.S.C.

a) Facts: creditor (plaintiff) received judgement against one of the co-owners (defendant) in JT, and a lien was registered against that co-owner’s interest in the property. The creditor wanted to bring an action for partition and sale of the defendant’s portion so that the judgement debt could be satisfied out of the proceeds (the creditor was concerned since the lien is a charge against the defendant’s interest, and so it will disappear if the defendant dies (Re Young is authority for this proposition).

b) Decision: Action dismissed. Only those who have a right (i.e. a vested interest) to possess can make an action for partition. The right to maintain an action for partition is limited to JT’s and TIC’s. Judgement creditors (who only have a charge / encumbrance) are not entitled to maintain a partition action (they must proceed through the Execution Act) and neither could a remainderman, reversioner.

c) Comment: recall Morris v. Howe where life tenant could not order partition over objection of consecutive interest (remainderman), although life tenant does have possession so potential uncertainty here

Court discretion: may focus on equitable “clean hands” maxim or on statutory discretion1) Rayner v. Rayner, (1956) B.C.S.C.

a) Facts: husband (plaintiff) was JT of a cottage with his wife (defendant). The cottage was purchased with the profits from a shop owned by the wife, but in which the husband worked. From the date of their separation, the husband had possession of the cottage and collected rents for 7 years. The wife then occupied the cottage claiming it as her home. The husband (seeming to want to cause her as much hardship as possible) then sought partition and sale of the cottage, but the wife felt that she was also entitled to 7 years.

b) Decision: Action for partition denied – wife entitled to sole occupation for same number of years as husband enjoyed. But when he seeks to make the right absolute, he must do so by invoking Equity. A court may exercise its equitable discretion (concerning fairness) in the awarding or refusing partitions and sales, and the considerations taken into account are different for a married couple than for business partners say. In this case a Maxim of Equity applied: “he who comes to equity must have clean hands” so for equity, there must be no unworthy malice, spite, or vindictive behaviour. Court saw the husband’s conduct in this case as poor.

c) Comment: but we are dealing with property rights, and so perhaps motive should not be relevant, as demonstrated in the percolating water case Bradford v. Pickles

2) Harmeling v. Harmeling, (1978) B.C.C.A.

a) Facts: Parties are married old age pensioners, neither very well. They jointly owned a house which was built for both to enjoy in their old age – it was originally in husband’s (defendant’s) name, but he added hers to ensure that she would be cared for later. Wife (plaintiff) used money from a personal injury award to build part of the house and to buy a motor home. She left her husband for another man and applied for partition. The husband also used the home for business. The partition was granted and the husband appealed.

b) Decision: Appeal granted (so no partition):i) Co-owner has a prima facie right to partition, and a corresponding obligation on others

to permit a partition and sale, and court should enforce this unless there is sufficient reason to deny this right.

ii) The Partition of Property Act s.2 says “may”, so gives a court discretion as to whether or not to order a partition (and the Act places no limits on that discretion). Thus the court should compel partition unless justice won’t be served and each case must be judged in light of its own facts.

iii) The court does not have to refuse an order simply because an applicant does not have “clean hands” – questions of motive or bad faith are not really relevant to property division.

iv) There is sufficient reason to deny partition in this case however: the house was built with the husband’s money and was intended for his retirement, proceeds could not buy him another house (i.e. considered hardship), it’s too late for him to change his lifestyle, and she left him by choice

c) Dissent: mere relative hardship is not a sufficient ground to deny partition, but would have to be a serious hardship to deny

d) Comments:i) Focused here was on the statutory discretion “may” and generally de-emphasized

conduct i.e. equitable discretion (focused on, for example, contributions/expenses paid and whether justice required no partition, rather than on the conduct of the parties and the “clean hands” equity maxim). Contrast this with Rayner v. Rayner which was based on Equity.

ii) If you are dealing with personalty, the Partition of Property Act would not apply and so you have to find jurisdiction for partition in equity and so all the equitable maxims would apply

3) Note that courts may give higher consideration for spouses (especially with children) and so are more likely to deny the other partner partition, whereas if the case concerns siblings (even if one has children) the discretion may be applied differently (since siblings not considered responsible for each other’s children) B.C. Family Relations Act (applies to marriage breakdown)a) s.55(2): In an order for partition and sale where payment is to one or both spouses, the court

has the discretion to refuse the order, or to change the division from 1/2 each4) B.C. Law Reform Commission: (not law, not adopted) – controversial recommendations

a) JT’s ought to allow unequal shares (and benefit of survivorship should be allowed despite those unequal shares)

b) Secret unregistered unilateral severance is in conflict with the registration system, so should not be allowed – either registration or at least notice to other co-owners should be required to make severance effective

c) The Morrow decision results in a creditor possibly losing out, since cannot seek partition and the charge will die with the co-owner (e.g. mortgage dies with mortgagor). Therefore law should be changed so that a creditor can seek partition, and a charge should continue to have effect after the co-owner’s death, becoming an encumbrance on the surviving JT’s

Future Interests

Conditions precedent (contingent) v. conditions subsequent (vested) v. absolute vesting1) “Gift over” = any transfer of property to take effect after the termination of an intermediate

estate such as a life estate2) A present interest is an estate in possession. It is “vested in interest” meaning have the interest

now, and additionally is also “vested in possession” meaning can take immediate possession (if “vested in possession” than will also be “vested in interest” automatically)

3) An estate in expectancy i.e. a future interest is a present right for future possession which will or may be obtained (it cannot be vested in possession)a) “will” means the future interest is vested in interest (i.e. certained – it must happen) e.g. to A

for life remainder to B, then B has an unqualified right to take possession as soon as the preceding estate ends and that preceding estate must end at some time (and if B happens to die before A then the remainder passes to B’s heirs because B has the interest already, that’s what vested in interest means)

b) “may” means the future interest is only contingent (i.e. uncertained, i.e. non-vested) i.e. it is dependent on the occurrence of some event (a contingency i.e. condition precedent) other than the guaranteed passing of a prior particular estate which may or may not occur, and so the interest may or may not become vested (recall a grantor with fee simple who gives a life estate is not giving the entire estate, but rather only a “particle” of that estate, and hence the term “particular estate”)i) e.g. to A for life remainder to B in fee simple if married at the time of A’s death (B has a

contingent remainder)ii) e.g. to A for life and then to C in fee simple if C marries D (C starts out with a

contingent remainder, and if C than marries D (while A is still alive) then C’s former contingent interest becomes vested in interest, and then on A’s death it becomes vested in possession).

iii) Similarly with: to A for life and then to B in fee simple if and only if B attains the age of 19 years (B starts out with a contingent i.e. non-vested interest, which become vested in interest if reaches 19 during A’s lifetime, and if so, then becomes vested in possession on A’s death)

iv) An interest is contingent until:(1) The identity of the grantee / devisee is established / ascertained and the grantee /

devisee is in existence (i.e. an unborn child - the identity is known, but the gift doesn’t vest until the child is born)

(2) The exact share of each member is ascertained: in the case of a class gift (i.e. a gift to a group of people defined by reference to status as a class e.g. children, grandchildren, children who have reached 21, grandchildren who are married, etc.) then the interest is contingent until the class becomes closed (i.e. no more can join the group e.g. there can be no more children)

v) The rule against perpetuities is relevant here since it only applies to contingent future interests (it basically says that contingent interests must vest, if they are going to vest at all, within a certain time period called the perpetuity period)

4) An interest may have a condition subsequent (e.g. from A to B but if X occurs then back to A) which means there is a possibility of divestment (called a defeasible grant). Note that a condition subsequent cannot stop vesting in the first place.

5) So must interpret documents to determine if there are any conditions (if there are no conditions it is an absolutely vested gift), and if so whether each is a condition precedent or a condition

subsequent. Where there is an ambiguity in a document between a vested interest and a non-vested interest, the courts have a preference for early vesting to avoid the problems of contingencies (such as the rule against perpetuities and the difficulty selling contingent interests) and choose whichever construction which will lead towards the vesting of an interest..

6) Illustration of condition subsequent (which can only occur after vesting and if it does it divests, but can’t prevent vesting in the first place like a condition precedent): Brown v. Moody, (1936) P.C.a) Facts: Deceased left fund of $100,000 the income of which was to be paid to son during his

lifetime. On the death of her son, 1/2 of the income was to be given to grand-daughter, and 1/6 to be given to each of her three daughters – let’s call the 4 of them the 4 D’s. In the event that any D should predecease the testatrix or the son, leaving issue, the children of that D would take over the interest. No one died before the testatrix, but one of the daughters died without children before the son died.

b) Issue: if one of the D’s died without issue and before the son died (as here), did that D actually have anything to pass on in their will (i.e. did they have anything vested in interest). If not, the interest they would have got (on the sons death) would pass back into the testatrix’s estate. The lower courts decided the latter, but the J.C.P.C. disagreed.

c) Decision: had to determine the scheme that the testatrix intended.i) In abstract terms: If no condition precedent, there is immediate vesting in the

remainderman on testator’s death (i.e. when grant takes place) so a preceding life interest never stops the vesting of an interest in the remainderman. Further, the mere postponement of the distribution of the capital, through the waiting for the life estate to terminate, will not by itself exclude immediate vesting of an interest.

ii) In this case: on the death of the testatrix, each D’s interest was immediately vested since no condition precedent here (such as requiring a D to out-survive the son) because the division of the capital must come eventually (i.e. when the son dies). Also, the purpose of the instrument is so that the son can enjoy the income during his life, and there is no reason to deny vesting to the ultimate takers to achieve this. So just like “to son for life then remainder to D’s” so each D has a remainder that was immediately vested in interest on the testatrix’s death.

iii) Normally if a D has a remainder vested in interest and D dies (before it becomes vested in possession) the remainder will simply go to D’s estate. However, there is a condition subsequent here since the will says if any D predeceases the son “with issue” then that D’s interest should go to their issue i.e. that D’s interest divests and so does not go according to that D’s will/estate.

iv) Note this condition subsequent does not apply if a D dies without issue before the son – in such a case it will pass as normal to D’s estate

v) So could re-word the will something like this: “to son for life, then remainder to D’s, but if any D should die with children and before son dies, then that D’s interest divests from that D and goes to their children”

7) Illustration of absolute vesting (i.e. neither condition precedent nor condition subsequent). Re Squire, (1962) Ont. H.C.a) Background: rule in Saunders - if there is an absolutely vested gift payable at a future time

along with all accumulated interest, then beneficiary, under the law of trusts, can demand the whole thing at age 21 (i.e. if you give someone something absolutely, can only deny access to them if they are under the age of majority, which was 21). Note: the trust must be absolutely vested in the beneficiary

b) Facts: Testator left certain properties to trustees to hold for his grandsons until they reach 30 years, and then convey it to them absolutely. Income was to be accumulated and added to the inheritance, unless they wished to pursue higher education, in which case they could encroach on the capital up to a certain amount. There were two further residuary bequests, the first offended the perpetuity rule while the second didn’t.

c) Issue: is there a condition precedent or condition subsequent or neither?d) Decision:

i) If a testator gives absolute gift giving both capital and accumulated interest, but attempts to accumulate interest for a number of years, then he is deemed to have meant an immediate gift. If the gift is contingent (i.e. condition precedent) or defeasible (i.e. condition subsequent) or if any other person may have an interest in the trust, then this principle does not apply.

ii) There was an absolutely vested gift to the grandsons (i.e. neither condition precedent nor condition subsequent) since the words in the will when read in context (recall wills are interpreted as a whole whereas grants inter vivos may look only at the granting clause) indicated an early vesting (which the courts tend to support):(1) “When and so soon as” or “upon attaining” are not conditions precedent, whereas “if

you should attain” is a condition precedent.(2) The property was separate from the estate (if it had been a condition precedent more

likely property would have been kept with the estate)(3) The income was to accumulate for one beneficiary (Teddy)(4) Most importantly there was no gift over specified i.e. didn’t say “to Teddy, but if he

dies before 30 then to B” (contrast this with Phipps v. Ackers).iii) Therefore the interest is vested absolutely and the rule in Saunders applies so the

grandsons were entitled to receive the property at age 218) Illustration of a condition precedent (i.e. condition which must be met before vesting can occur)

Re Carlson, (1975) B.C.S.C.a) Facts: Testator devised the residue of his estate to be held in trust and invested, and that the

income and capital be used for maintenance, education & advancement of youngest son Chris (C) until he reached 21. The then residue was then to be divided between C (45%), the daughter (D – 45%) and other son (S to pay his debts – 10%) i.e. the estate which is already vested is to be divested in favour of the 3 of them

b) Issue: Is there immediate vesting for D & S on the death of the testator or is there a condition precedent (i.e. not vested till C reaches 21)?

c) Decision:i) The court said it must “sit in the armchair of the testator” in order to interpret the

circumstances in which the will was made by the testator to discover his intent in creating the will.

ii) The court found his intention was to keep the whole (both income and capital) for Chris’ use until he reached 21, and that if there was nothing left when Chris reached 21 to give to his siblings that would be ok (this was based on the fact that the executor was directed to use not only the income but also the capital of the estate residue for Chris’ benefit until the age of 21). It was therefore inconsistent to have D’s and S’s shares vesting immediately at the death of the testator

iii) Distinguishes Re Squire where only one person is involvediv) When the whole of a gift, income and capital may be used for the benefit of one person

until a stated age, and “then the residue” is to be divided between him and another, the residue is not vested in the other until the first person reaches the stated age. This is

because when the first person has the power to encroach, the interest in the residue cannot vest as the exact amounts (or even if anything will be left) cannot be determined

v) Thus Chris had an immediate and vested interest in the gift subject to a trust for D and S for their portions of the residue. D and S had contingent interests subject to C reaching 21.

vi) The court will only interpret in favour of a vested interest over a contingent one where language is ambiguous

vii)Note that the estranged wife was left $1.00 and said she can maintain herself, to prevent scrutiny under the Wills Variation Act, but such clauses are double edged swords since if they are too obviously spiteful they may encourage the court to change the will

d) Comment: Cannot say that certain words always create a condition precedent and other always create a condition subsequent, since must look at the provisions of a will in context (for example, the context here was that the testator wanted to provide for Chris). However, without further context words like “upon”, “when”, “if”, “as”, “as soon as”, “provided” all are more likely to imply conditions precedent, whereas “but if” is more likely to imply condition subsequent.

9) Another way to avoid a condition precedent and gain a vested interest (with a condition subsequent) was shown in Phipps v. Ackers, (1842) H.L.a) Facts: Testator devised land to his trustees to convey to his godson upon his reaching 21,

but if godson doesn’t reach that age and he doesn’t leave issue, then will shall divest and become part of the estate residue which goes to P, the testator’s wife. At the time of the testator’s death, godson George was 12. George did attain 21, but the P claimed the income from the estate that accrued from the time of the testator’s death to when the son reached 21

b) Issue: Who is to get the income that accrued over the 9 years? P arguing that George’s interest is contingent i.e. that he must reach 21 is a condition precedent and so he would not get a vested interest till reaching that age (suggesting the income should go elsewhere until that time). But can argue the same for P i.e. that there is a condition precedent on her interest, namely that her interest doesn’t vest unless George does not make it to 21 (and so she shouldn’t get the income either). But someone must get it!

c) Decision:i) “if there is a gift over upon death under the stated age, the gift over shows that the first

devisee is to take whatever interest the person (i.e. the second devisee) claiming under the devise-over is not entitled to i.e. the immediate interest.” i.e., by looking at what the 2nd person doesn’t get you determine what the 1st person does get.

ii) So when a gift is to a devisee upon attaining a certain age, with a gift over to some other ascertained person(s) if the devisee dies before reaching that stated age, the very existence of the gift over shows that the first devisee is to take an immediate interest (albeit subject to divesting if don’t reach that age)

iii) In this case: the second devisee here (P) did not get an immediate vested interest (on the death of the testator) since don’t get anything if George makes it to 21 (or he dies before 21 but has issue), so therefore the immediate vested interest must go to George, and so the condition of reaching 21 (without issue) is a condition subsequent for George. These words of contingency apply as a condition precedent to the gift over, not the gift.

iv) The court gives a typical rule of interpretation: “sometimes you can give the literal meaning to words, but where the context conflicts with those meanings, it overrules them”

d) Comment:

i) When you see a clause that says what happens if grantee dies before attaining contingency and mentions issue, then Phipps v. Ackers is likely to apply

ii) Note difference with Re Squire, since the will here said what would happen if George did not reach 21 without issue

iii) This rule applies to equitable interests as well. Therefore, the 2nd party gets nothing, unless the 1st party fails to fulfil the stipulations of the gift

10) The Phipps v. Ackers rule applies to personalty as well as realty: Re Barton Estate, (1941) S.C.C.a) Facts: Testator left sum of money to his grandson when he “shall attain 25”, but allowed the

income to be used for his maintenance and education prior to his attaining 25. If the grandson did not attain 25, and left no wife or children (among whom the money could be divided equally), then it should fall back into the residue of the testator’s estate.

b) Issue: is the grandson entitled to the income generated during the intervening years until he reaches 25? The answer will be yes if the grandson’s interest is vested, but no if it is contingent (i.e. condition precedent)

c) Decision:i) Approved the rule in Phipps v. Ackers: “if there is a gift over upon death under the

stated age, the gift over shows that the first devisee is to take whatever interest the person claiming under the devise over is not entitled to i.e. the immediate interest.”

ii) Thus the grandson took a vested interest subject to it being divested should he not reach 25. Therefore the grandson is entitled to the intermediate income upon reaching the stated age

d) Comment: Recall it is best to use “child” instead of “issue” which means “lineal descendants”. Also, when see “without issue” or “without children” this is likely to be a condition subsequent.

11) However, just one year later we were given a limit to the application of the Phipps v. Ackers rule (i.e. condition precedent rather than condition subsequent found on age attainment requirement in contingent remainder): Festing v. Allen, (1843) Excha) Facts: Testator left land to his granddaughter for life, and upon her death, to her children

who shall attain 21, and if no such issue the land was to go into other trusts specified in the will. On the granddaughter’s death she left three infant children all under 21 (these children were born out of wedlock and the courts used to treat such children as non-existent)

b) Issue: do the children obtain anything here?c) Decision:

i) Rule of destruction of contingent remainders: if a remainder was still contingent at the time when the prior particular estate ends, this would result in an unacceptable gap in seisin (see Rule 2 below on remainders). Therefore, on passing of the prior particular estate, all unmet contingencies are destroyed.

ii) Thus the infant children did not get vested interests subject to divesting if they didn’t reach the specified age (as was given in Phipps v. Ackers) because they had not reached 21 upon the death of their mother.

d) Comment:i) If upon her death she had a single child of 21 (and others under 21), that one child would

have taken absolutely to the exclusion of all other children.ii) The court could have used Phipps v. Ackers to allow the children to get everything not

given in the gift over, but this would have overturned the long-standing common law rule of destruction of contingent remainders

iii) Can get around the rule of destruction in Equity, but here the trust was not properly set up. See Re Robson (which, if the decision is correct, says everything in a will is equitable).

iv) The rule of destruction was abolished in England in 1877 by Contingent Remainders Act, but no such legislation here in B.C. so Festing v. Allen can still apply (e.g. see Re Crow)

v) Also in Phipps v. Ackers the beneficiaries were ascertained on the death of the testator, but they weren’t in this case. The rule in Phipps v. Ackers is severely limited by context. Facts must be almost identical to Phipps v. Ackers or Re: Barton estate before the rule applies.

Common Law future interests: reversions, remainders, rights of entry, possibility of reverter1) There are three types of future interests

a) Common law future interests applies to legal interestsb) Legal Executory Interests (see below) applies to legal interests created by the Statute of

Uses executing the use (not the double use)c) Equitable future interests (see below) applies to the equitable interest created by the double

use (i.e. a trust).2) There are 4 types of future interest at common law are:

a) Reversions:i) Always vested in interest (i.e. it concerns something that must return, not may) and is

that part that remains with a grantor who has not exhausted the whole of the interest by the transfer

ii) e.g. A, holder of fee simple grants to B a life estate, so possession leaves the grantor but future interest of return of that possession remains with grantor

iii) A can later dispose of the reversion (by sale, gift or will) and the interest of the recipient is still called a reversion because, although disposed of by A, it still retains the status it had when it first came into existence

b) Remainderi) Grantor A gives smaller estate than the complete interest to B, and so gives what is left

over (the remainder) to C. Thus a future interest where possession is postponed until after the expiration of some prior particular estate

ii) Only way at common law to give a future interest to a third party (although grantor can assign their other common law future interests to a third party)

iii) E.g. A grants a life estate to B with remainder to C in fee simpleiv) Can be vested in interest or contingent

(1) E.g. A transfers property to B for life and then to C in fee simple. Here C gets a vested remainder (vested in interest, but not vested in possession untill B’s life ends)

(2) E.g. A transfers property to B for life and then to C in fee simple if C marries D. Here C gets a contingent remainder since a condition precedent has been added to it.

c) Right of entry (a.k.a. right of re-entry)i) Defeasible grant with a condition subsequent that can occur after vesting and if so

grantor has right to re-enter (i.e. upon condition occurring, grantor can bring an action to recover possession, but up until exercising this right the transferee continues to enjoy the property, and there is a limitation period of 6 years within which the grantor must bring the action - Property Law Act s.8(3) and Limitation Act)

ii) A complete gift is given, but the condition subsequent operates so as to artificially / prematurely terminate an estate by giving grantor right (i.e. option) to re-enter and determine the estate (i.e. to divest grantee)

iii) This is an exception to repugnancy that is permittediv) Note that a condition subsequent can also be used in a legal executory interest (which is

not common law and can grant to a third party – see below)v) e.g. from A to B in fee simple but if B marries C then property to return back to A (other

common words are “provided that”, “on condition that”, “if it happens that” although remember words in a will must be read in context)

vi) The contingency (i.e. the condition subsequent) can’t prevent vesting, but rather it divests an already vested interest if and when the contingency occurs (contrast this with a condition precedent which prevents vesting in the first place).

vii)Thus an estate with a condition subsequent is vested, but the right of entry itself (i.e. the return of the property to the grantor) is contingent, since the condition subsequent in the gift is a condition precedent for the right of entry

viii) Think of the condition subsequent as a rabbit (the condition) sitting on the log (the gift), and if the condition subsequent is invalid, the rabbit is simply flicked off leaving the log (i.e. leaving a valid absolute gift) behind. Contrast this with an invalid condition precedent, which becomes an impossible to satisfy contingency, and so the gift can never be vested.

ix) Be careful of the words contingent and contingency: contingent means there is a condition precedent, and both a condition precedent and a condition subsequent is called contingency

x) Note the Property Law Act s.8(3): a right of entry affecting land, exercisable on breach of condition may be made exercisable by any person and the persons claiming under him. This has not be interpreted by the courts, but could be interpreted to allow a 3rd party to a right of entry. At common law however, only with a remainder can a grant of a future interest be made to a third party

d) Possibility of reverteri) Arises when a grantor creates a determinable gift in fee simple or life estate i.e. which is

to last until the occurrence of some future determining event specifying a slot in time written into the words of limitation, and the event may or may not happen

ii) E.g. from A to B in fee simple until B marries C (other common words include “while”, “whilst”, “during”, “so long as”, “as long as” although remember words in a will must be read in context). A maintains a possibility of reverter, and if B dies without marrying then the fee simple goes to B’s estate as an absolute fee simple (since the determining event can never now occur that B is dead)

iii) The grant is subject to divestment i.e. legal ownership will automatically revert back to grantor on determining event occurring, if it occurs at all

iv) It is not giving completely and taking back, as in right of entry, rather it is giving something less. Thus, the courts have decided that the possibility of reverter itself is vested since courts have considered the determining event to be a “natural” termination as opposed to a condition subsequent which cuts short an otherwise completely given estate.

v) Think of this as a rabbit (determining event) in a log (the gift) – it is an integral part of it that cannot be simply flicked off. So if the determining event is invalid it makes the entire gift invalid (dead rabbit in log makes the whole thing stink!)

3) Illustration of possibility of reverted/determining event/determinable estate: Re Tilbury West Public School Board and Hastie, (1966) (Ont. H.C.)a) Facts: By deed in 1890 land conveyed in trust school board for so long as it is used for

school purposes, after which time it would be returned to the owner. The land was used for school purposes until 1961, after which it was used for storage of school things. In 1964 the Dept. of Highways expropriated the land.

b) Issue: Was the grant a determinable fee simple subject to determining event and a possibility of reverter or was it a fee simple subject to a condition subsequent and a right of entry. School wanted the latter since if it was a condition subsequent it would be invalid (due to uncertainty) and so the condition would be “flicked off” leaving the gift of land with the school absolutely.

c) Decision:i) The distinction between a possibility of reverter/determining event and a right of

entry/condition subsequent is that a determining event itself states the limit for the estate first granted in the granting clause (as opposed to giving a complete grant and then defeating it by cutting it short with a condition subsequent which is an independent clause) and reverter is automatic/natural (whereas with a condition subsequent the grant continues until the right of entry is exercised)

ii) The words “so long as it shall be used for” create a determinable fee simple with a right of reverter, because the limit is within the granting clause and this interpretation is supported by the habendum.

iii) Payable in part to both parties because after 1961 the land was only partly used for school purposes.

iv) Found that the rule against perpetuities did not apply to the possibility of reverter (since it is considered to occur naturally and so is not contingent – something of a fiction)

d) Comment: rule of construction: in interpretation and deciding between a right of entry and possibility of reverted, if there is any inconsistency in the deed the earlier direction governs e.g. if the words providing for a return of the lands are considered inconsistent the granting clause , then the granting clause should control (not an issue here since they are consistent)

4) Illustration of right of entry/condition subsequent/defeasible: Re McKellar, (1972) Ont. H.C.a) Facts: In 1892 land was granted to the C.N.R. “only so long as they continued to use the

land for railway purposes”. C.N.R. proposed to abandon the railway lineb) Issue: Was the interest a determinable fee simple or a defeasible fee simple with condition

subsequent (in the latter case the condition would be invalid under the rule against perpetuities)?

c) Decision:i) With a determinable estate:

(1) The determining event is part of words of limitation and marks natural boundary of the estate rather than operating to defeat it.

(2) It does not grant complete fee simple to grantee, but a limited estate.(3) It is an essential characteristic of all determinable estates that they may possibly

endure forever.(4) Can be created either “until a specified contingency shall happen”, or “as long as an

existing state shall endure”.(5) No specific words are needed as long as words are clear that they mean that the

duration of the estate depends upon the future eventii) On the other hand, a fee simple subject to a condition subsequent:

(1) The condition is an independent clause added to a fee simple absolute and operates to defeat it prematurely, operating to defeat title already granted before that title reached it’s natural boundary

(2) Right of entry must be exercised by grantor or estate to destroy the fee simple(3) Normally created by use of words including “but if”, “until”, etc.

iii) In this case the grant was forever, followed by a condition which included the words “become entitled to enter” which seem to contemplate a right of entry. The condition is an independent clause - it does not set a limit on the estate first granted (as it was granted for forever) but rather operates so as to defeat it. Thus C.N.R. held a fee simple interest subject to a condition subsequent. But since the condition is invalid the land would not revert.

d) Comments: Words are strong general indicators to decide if determinable v. condition subsequent, but must still interpret them in the context of the document

Rules restricting remainders, avoided by legal executory interests & equitable future interests1) Recall that remainders are the only way at common law of creating a future interest in a 3rd

party. They are in arbitrary order. Note prior to 1535 (Statute of uses) could get around these common law rules in Equity, and after 1535 by legal executory interests (see below).

2) The first two rules concern gaps and springing interests (gap means a gap in seisin and a springing interest is one that attempts to just springs up to fill a gap – these first two rules say that such gaps and springing interests are not allowed):a) Rule 1: A remainder must be supported by a prior estate of freehold created by the same

instrument as the remainderi) E.g. A (owner in fee simple) transfers Blackacre “to B for life and then to C & his heirs

in fee simple”. B has life estate vested in possession and C has a remainder vested in interest. So B’s estate is the prior estate of freehold which supports the remainder interest in C, so there is no gap in seisin, and therefore the remainder is valid

ii) E.g. A (owner in fee simple) transfers Blackacre “to B for life & then to C and his heirs if C reaches 21”. B has life estate vested in possession and C has a contingent remainder in fee simple. B’s prior estate in freehold supports the contingent remainder in C. A would also get a reversion upon a failed condition precedent, so if on B’s death C hasn’t reached 21, returns to A (i.e. common law prepared to wait and see if the contingency will be met, and if not then the contingent remainder is destroyed – note the common law is not prepared to wait and see for perpetuity purposes however). Thus valid

iii) E.g. A (owner in fee simple) transfers Blackacre “to B and his heirs if B reaches 21”. B gets nothing due to invalidity (assuming B is not already 21). The grant offends the rule because there is no preceding estate of freehold to support the contingent interest which A wished to confer on B. i.e. A trying to create a “springing interest” here that will just pop up after a gap in seisin when B turns 21.

iv) E.g. A (owner in fee simple) transfers Blackacre “to B for 2 years and then to C & his heirs if C reaches 21”. C gets nothing because, although there is a preceding interest in B, it is only a leasehold interest (it is a precise amount of time) and not a freehold estate. So no prior estate of freehold, and invalid

b) Rule 2: A remainder must be limited so as to be capable of vesting, if it vests at all, before or at the moment of termination of the prior freehold estatei) E.g. A transfers Blackacre “to B for life, remainder to the first son of B to reach 21

provided that he reaches 21 during B’s lifetime”. Remainder is good here because the interest must vest in son, if at all, by the time of B’s death. If a son has reached 21 they

get the remainder on B’s death, and if a son has not reached 21 on B’s death then the condition precedent on the remainder will be immediately unsatisfied on B’s death – so either way know whether or not the remainder will vest at the moment of B’s death. Thus there is no possibility of a gap in the seisin between B’s death and the vesting of the remainder, and therefore valid.

ii) E.g. A transfers Blackacre “to B for life, remainder to the first son of B to reach 21”. Here it is possible that a son of B could have reached 21 on B’s death, or alternatively that no son of B had reached 21 by B’s death but that one could do so after B’s death. Thus there may or may not be a gap in the seisin. Accordingly, the remainder is treated as prima facie good since it may be valid (i.e. the common law will wait and see what happens on B’s death) but the contingent remainder will be destroyed if condition precedent has not been met on B’s death (i.e. no son has reached 21 at that time) – thus A holds a contingent reversion, with condition precedent = no son has reached 21 on B’s death. Recall this is the rule of destruction of contingent remainders mentioned in Festing v. Allen.

iii) E.g. A transfers Blackacre “to B for life and one year after his death to B’s son”. Grant to B’s son is void ab initio (from the outset) since there would inevitably be a gap in seisin.

3) The next two common law rules disallow shifting interests (shifting refers to title moving from one person to another):a) Rule 3: A remainder is void ab initio if it takes effect in possession by prematurely

defeating the prior estate of freeholdi) This rule is based on the common law principle that a condition subsequent could only

benefit the transferor (or his estate) through a right of entry and could not benefit a 3rd party

ii) E.g. A transfers Blackacre “to my daughter for life, but if she marries Bud, then to my son & his heirs”. Interest in favour of son contravenes this rule because the life estate of the daughter was liable to be prematurely terminated by the condition subsequent (i.e. upon her marriage to Bud). The interest to the son is therefore void ab initio.

iii) At common law this rule could be circumvented by making the prior estate a determinable life estate with a determining event and hence a “natural” ending (rather than a condition subsequent and a premature ending). So change “but if” to “until”: A transfers Blackacre “to my son for life until he marries Betty Sue, and then to my daughter and her heirs”. This is a valid interest as the remainder awaits the natural termination of the prior supporting interest (which is a determinable life estate i.e. simply giving less to begin with in the first gift)

b) Rule 4: A remainder after a fee simple is voidi) As the fee simple is the greatest interest a transferor can have, the rule that he could not

pass a remainder after the entire fee simple had been disposed of seems obvious. This also applies to a transfer of a fee simple with a condition subsequent, and to a determinable fee simple. Note however, that a determinable life interest with remainder is good under both rule 3 and 4 because it is not prematurely ended, and it is a life estate rather than a fee simple

ii) E.g. A transfers Blackacre “to my daughter & her heirs, but if she marries Alvin then to C & his heirs”. The interest created in favour of C is void ab initio because it attempts to create an interest after a fee simple has been granted (and it cuts short the previous freehold), and so is invalid under both rules 3 and 4

iii) E.g. A transfers Blackacre “to my daughter and her heirs, until she marries Alvin then to C and his heirs”. This is ok under rule 3 since only a determinable estate was given to the daughter, but it is a determinable fee simple and so the remainder is invalid under rule 4.

c) Note the Property Law Act s.8(2) might allow a right of entry to be exercisable by any person, and so there has been a legislative allowing of shifting interests, going against these last 2 common law rules (still to be tested in court)

4) Legal executory interests:a) These 4 common law remainder rules (including) only apply to legal title future interests.

Prior to the Statute of Uses 1535, could therefore get around the rules by using the single “use” i.e. a feoffor giving legal title to a feoffee and equitable title to a cestui que use, and this equitable title could be passed as remainder without having to worry about the 4 remainder rules.

b) But the Statute of Uses “executed” such equitable interests into legal interests by passing the legal title from the feoffee to the cestui que use, and the cestui que use now had what is called a legal executory interest (note there is only a single “use” here, not a double “use” which would create a modern day trust). However, four common law remainder rules still do not apply to a legal executory interest since the Statute of Uses said that the interest the cestui que use now had would correspond to the equitable interests they held before (to which the 4 common law remainder rules). Thus springing and shifting can be valid at law as legal executory interests

c) E.g. “A transfers Blackacre to B and his heirs when B reaches 21” is invalid due to gap/springing in legal title, whereas “A transfers Blackacre to X and his heirs to the use of B and his heirs when B reaches 21” is valid because the “use” is executed (so X actually gets nothing) and a legal executory interest is given to B called a “springing use” because the interest springs up of its own accord without any prior supporting estate of freehold

d) E.g. “A transfers Blackacre to B for life and one year after B’s death to B and his heirs” is invalid due to gap/springing in legal title, whereas “A transfers Blackacre to X and his heirs to the use of B for life and one year after B’s death to C and his heirs” is valid

e) E.g. “A transfers Blackacre to B for life but if B marries C then to D and his heirs” is invalid at common law, but “A transfers Blackacre to X and his heirs to the use of B for life but if B marries C then to the use of D and his heirs” is ok since C takes a legal executory interest called a “shifting use” because, on the specified event happening (marriage) title shifts from B to D

f) The interests which originate behind uses are called executory interests. If they arise in an inter vivos conveyance they are referred to as executory limitations, and if from a will as executory devises. For testamentary transfers the court would imply the words “to the use of” to save the gift by making it an executory devise, but the words “to the use of” must be used for inter vivos transfers (still true today) to create an executory limitation.

g) Indestructability:i) Recall from Festing v. Allen that a gift such as “to B for life, remainder to children of B

on reaching 21”, although this might break rule 2 the common law was willing to wait and see what would be the situation on B’s death, and if at that time all of B’s children were under 21 the contingent remainder would be destroyed

ii) Pells v. Brown (1621) decided that this rule of destruction of contingent remainders does not apply to legal executory interests (so such an interest could have saved the gift in).

iii) However, destruction is not avoided in every case: Purefoy v. Rogers (1671) revised Pells v. Brown: If an interest, even though arising in a grant to uses or in a will, complied with the four common law remainder rules, it had to be treated as a remainder and run the risk of destruction and this is presumably still the law in B.C. (see application in Re Crow in Ontario). So if “waiting and seeing” under rule 2 with an interest that was otherwise valid by the 4 rules, if it turned out the condition precedent on the contingent remainder was not satisfied, could not then save the remainder by calling it a legal executory interest. To get around this problem, use a trust (see below)(1) E.g. A transfers Blackacre “to B & his heirs to the use of C & his heirs on C reaching

21.” This is obviously not a valid remainder and therefore must be an executory interest to which the common law remainder rules and the rule of destruction do not apply.

5) Equitable future interests:a) Recall in Equity the double use got around the Statute of Uses, with words such as “unto and

to the use of trustees in trust for beneficiaries” (where “unto” means giving the legal title to A, and there is then a double use/trust which are synonyms, the first of which is executed by the statute). Remember not to flirt with the statute by only saying use/trust once (although common practice to simply say “in trust for” – courts will look for the 3 certainties to decide if there is a trust)

b) Recall also the resulting trust (works on theory of intent of creation of a trust by the grantor) and constructive trusts (remedy imposed by law to avoid unjust enrichment)

c) Can avoid all of the difficulties of common law except the rule against perpetuities: Equitable future interests are not subject to the 4 common law remainder rules and they are not subject to the rule of destruction of contingent remainders (and in particular are not subject to the rule in Purefoy v. Rogers) – the only thing that binds equitable interests is the rule against perpetuities. E.g. Can have gaps in equity, since it is only the benefit that will have a gap and not the legal title (which always remains with the trustee), and the benefit during that gap will simply go to the trustee

d) So not surprisingly trusts are used extensively today (note that in Festing v. Allen it was not clear that a trust existed).

e) Everything that can be done at common law can be done in equity (i.e. any type of future interest which could be created at common law or under the Statute of Uses can be created as an equitable future interest)i) E.g. “unto and to the use of X in trust for: A for life, remainder to B and his heirs”

creates in B a vested equitable remainder (corresponds to the common law vested remainder)

ii) E.g. “unto and to the use of X in trust for: A for life, remainder to B and his heirs on B reaching 21” creates in B an contingent equitable remainder (corresponds to the common law contingent remainder)

iii) E.g. “unto and to the use of X in trust for: A for life, but if B marries C then to B and his heirs” creates in B an equitable executory interest (corresponds to the common law legal executory interest that can arise under the Statute of Uses)

f) Rules of destruction do not apply to an equitable contingent remainder that has been turned into a legal contingent remainder through the Statute of Uses. (Re Robson)

g) Re Robson, (1916) (Ch. Div.)i) Facts: (similar to Festing v. Allen): Testator devised property to his daughter for life and

the remainder in fee simple to such of her children as shall attain 21 and if more than one

in equal shares as tenants in common. The daughter died leaving four children, two of whom were over 21 and two who were not.

ii) Issue: Are 2 younger children excluded from their share because they weren’t 21 before their mother died?

iii) Decision:(1) All four children get shares.(2) Court considered testators intention was that all children who at any time will attain

21 shall take a share (even though their interests may still be contingent at the time of the life tenant’s death).

(3) In order to get around the destruction demonstrated in Festing v. Allen, court interpreted the English equivalent of s.77 and s.78 of the B.C. Estate Administration Act which says that “the personal representative of a deceased person must hold the real estate as trustee for the persons by law beneficially entitled to it”.

(4) From this the court essentially said everything in a will is equitable i.e. the freehold estate is vested in the executors, not the life tenant, and the executors held the land as trustees for those who were entitled to equitable estates on the death of the testator.

iv) Comment: after 1925 in England statutory reform saying same thing as this case (and similar legislation in Manitoba) but not in B.C. There is considerable doubt as to the validity of this case – if it doesn’t apply, then the only way to have an equitable interest is if there is a trust (and in trust law today you do not need special words but must speak in terms that are certain). So in considering a fact pattern today must say “If Robson is correct then anything in a will is equitable and so avoids remainder rules, Purefoy and destruction, but otherwise …”.

h) Re Crow (1984) (Ont. H.C.)i) Facts: in a will, property given to A and B for life, remainder to their children, and if no

children then to their nieces and nephews. On A’s death there were no children able to claim the remainder, but potential recipients were subsequently born.

ii) Issue: does the rule in Purefoy v. Rogers apply to invoke rule 2 and make the remainder void (i.e. destruction of contingent remainder)?

iii) Decision: Court applied Purefoy, hence destruction of remainder i.e. did not apply Re Robson to make the gifts equitable, either because Re Robson was not cited to the court or because the court considered Re Robson to be wrong.

6) So in summary, if something springs or shifts:a) Check first to see if it is an equitable future interest i.e. a trust (i.e. a double use) – if so, no

problemb) Is it in a will? If so, say “If Re Robson is correct, then anything in a will is equitable and so

avoids remainder rules, Purefoy and destruction, but otherwise …”c) Check to see if it is a single “use” creating a legal executory interest (or if it is testamentary

in which case courts will imply a single “use” to save the gift) – if so, no problem unless it meets the 4 common law remainder rules in which case will be treated as a remainder and so still runs the risk of destruction after a wait and see period (Purefoy v. Rogers)

Attributes of future interests: protection from equitable waste, alienability, registration1) Protection of the Land:

a) The owners of future interests are obviously interested in protecting the value of their interest.

b) The right of the owner of an equitable future interest is against the trustee, who, if he is not protecting the land, is probably breaching the trust. Owners of a future interest which is a contingent remainder may be in a weaker position than the owner of a vested remainder.

c) Using the doctrine of equitable waste the courts can keep a balance between the current possessor and the holder of the future interest. E.g. City of New Westminster v. Kennedy (1918) (B.C. Co. Ct.): the purchaser in a tax sale acquires an equitable interest which may ripen into full title if the assessed person does not redeem before the expiration of the redemption period, and the assessed person (who remains in possession during that time) cannot commit equitable waste (court ordered repair of the house in this case after that person had stripped the house of everything removable)

2) Alienability of Future Interests:a) At Common Law some types of future interests could be disposed of inter vivos and others

could notb) B.C. Property Law Act s.8(1): a contingent, executory or future interest in land, and a right

of entry on land, immediate or future, vested or contingent may be disposed ofc) B.C. Wills Act s.2: a person may devise or dispose of all property to which he is entitled in

law or in equity, of estates pour autre vie, contingent, executory, or other future interests in property, and rights of entry

3) Registration of Future Interestsa) B.C. Land Title Act s. 172: future interests are registered as a “charge” against the propertyb) B.C. Land Title Act s.176: title of trustee registered but details of trust are notc) B.C. Property Law Act s.10: a possibility of reverter or a right of entry for a broken

condition may be registered under the Land Title Act in the same manner as a charge

Validity of conditions/events, restraints on alienation1) Recall the effects of an invalid condition/event:

a) Condition subsequent (defeasible / right of entry): invalid condition subsequent “flicked” off since not part of words of limitation leaving absolute gift (Re McKellar)

b) Determining event (determinable / possibility of reverter): invalid determining event makes the entire gift void because event is part of the words of limitation (Re Tilbury). As a result courts will sometimes take a results-oriented approach and try to interpret as a condition subsequent so the gift can remain

c) Condition precedent (contingent interest): invalid condition precedent makes it impossible to satisfy, so generally invalidates the gift

2) A gift can also be void if:a) It is illegal (e.g., murder)b) It contains restraints on marriage that go against public policyc) It is a restraint of alienation (e.g. Re Leach "until")

3) Restraints on alienation and repugnancy:a) Generally by repugnancy an owner can’t give something away and then control what the

person who received the property does with it (for both real and personal property). With respect to land, the Statute of Quia Emptores 1290 tried to control restraints on alienation

b) Blackburn and Cox v. McCallum, (1903) S.C.C.i) Facts: Testator devised to his sons land with the condition that the land could not be

disposed of, or encumbranced, until 25 years after his death. One son mortgaged the land and the Ps were assignees of the mortgagees. The son defaulted and P took the land and sold it to D. D objected that the restriction on alienation in the will rendered the mortgage void so that P had no title to pass.

ii) Decision: The mortgage was good since the son took the land in fee simple. A general restriction on alienation is bad (a restriction on alienation is valid if it applies to, or excludes, only a particular class of persons). If already a total restraint then limiting it by time will not make it acceptable. However, if only a partial restraint then limiting it by time can make it more acceptable.

c) Re Brown, (1954) Ch. Div.i) Facts: Testator left property to four sons with the restriction that they could only

alienate to their brothers, otherwise their interest would be held in trust for the grandchildren who shall attain 21 (i.e. condition subsequent attempted to control alienation).

ii) Issue: is this restriction on alienation repugnant, or is there an exception to repugnancy that allows it?

iii) Decision: The restriction clause is void and can be ignored.(1) Recognized that the old exception to repugnancy to allow restraints on alienation had

become the rule. Exceptions have been recognized and they have grown:(a) Can restrict from alienating to an individual: E.g. “to B, but if B sells to C then

right of entry back to grantor” was acceptable.(b) Can restrict from alienating to a particular class of persons: E.g. “can’t sell to

D,E,F,G” was acceptable.(c) But what about “can’t sell it except to H” where H = brothers in this case

(2) To determine if a particular restrain on alienation is valid, must ask whether the condition takes away the whole power of alienation substantially – it is a question of substance, not of mere form

(3) If restricted to alienating to a class, and the class is diminishing (as opposed stationary or expanding e.g. “lineal descendants”, “family”, “brothers and heirs”) then the restraint is generally invalid since repugnant i.e. over time will amount to a general prohibition on alienation. So if the testator attempts to keep the land in the family by restricting alienation to family members of a specific generation, then he is restricting alienation to a diminishing class e.g. if restricted to 2 brothers (as here) then they will eventually die so class is diminishing.

d) Re Porter, (1907) Ont. Div. Ct.i) Facts: The testator provided that the son was not to mortgage or sell the lands provided

to him.ii) Decision: This provision was held to be valid because it did not prohibit alienation by

will, lease, or other manner. A clause prohibiting a particular type of alienation is therefore perhaps ok.

e) Re Leach, (1912) Ch. Div.i) Facts: Testator drew his own will and put his freeholds in trust. He devised land to his

nephew (P) “until” that nephew assigned or charged it, or became bankrupt (i.e. a pretty significant restriction). There was also the restriction that he leave it to the male heirs of his body. If there were no male heirs it was to go to his male nephews. This was a limited gift, not a restraint on alienation.

ii) Decision: Restriction was valid, because the equitable estate was determinable (used “until”) and so would “naturally end” rather than being a restraint on alienation i.e. had not given a complete gift but then made it defeasible with a condition subsequent i.e. not giving then threatening to take away, but rather giving less in the first place. If there was a condition subsequent (“but”) then the restraint on alienation may have been repugnant.

iii) Comment: by building the restraint into the clause by using it to define the slot in time (and so determinable rather than defeasible) the problems of repugnancy are avoided.

4) Void for Uncertaintya) History:

i) Uncertainty used to arise in racial and religious circumstances e.g. “to A but if marries a Catholic then …”. Courts historically used uncertainty to get rid of racial/religious conditions like these (by asking what is a Catholic – someone who is a regular church goer, or someone who says they are, etc) but really a policy decision

ii) E.g. Re Tuck (1949) (English)(1) Facts: Condition subsequent, donee had the interest “but if she married outside the

Jewish faith” then divests, and if any question as to whether the person she marries is Jewish, the question should be referred to the chief Rabbi to decide

(2) Decision: Lord Denning found this to be valid – by referring uncertainty to the chief Rabbi that uncertainty is removed (even though this imposes the chief Rabbi’s views on the private arrangement and could be argued it ousts the court’s jurisdiction)

b) With a condition subsequent, it will take place after vesting and may continue to have importance for entire duration of the estate, so courts have said it is important that the donee be able to understand clearly, from the outset, what actions/conditions will lead to loss of the interest i.e. for condition subsequent need good clarity of meaning and if not then uncertain so void

c) For a condition precedent, however, it need only be applied once at the beginning of the interest (e.g. does this person qualify or not) and can then forget it. E.g. “to B if tall” and if someone 6 feet claims it, although far from certain what tall means can say yes, 6 feet qualifies, and that is the end of the matter (as a condition subsequent this would likely be void for uncertainty) i.e. don’t have to be able to explain meaning of a condition precedent as clearly

d) Re Messinger Estate, (1969) B.C.S.C.i) Facts: Testator left his wife a life interest in a Vancouver home “while she resides in the

home”. On her death or should she leave the home in her lifetime, it was to be distributed between the two daughters. At the time of the testator’s death to the present the widow never resided in Vancouver and doesn’t want to in the future

ii) Issue: is the “resides” condition void for uncertainty (i.e. could mean physically, or just paying the taxes, or might mean a two week holiday away would terminate the interest)?

iii) Decision: The condition is void for uncertainty (policy reason = shouldn’t be able to force person to reside in a home when the person is not even a resident of that city). Note the importance whether this was a determining event or condition precedent (invalid event/condition means entire gift invalid) or a condition subsequent (invalid condition means it is “flicked” off and gift remains as absolute). So as not to invalidate the gift, courts try to find condition subsequent rather than condition precedent (i.e. presumption of early vesting if there is doubt) or determining event. The will clearly states that a “life interest” is given and the condition was a condition subsequent, so condition “flicked” off.

The rule against perpetuities, the Perpetuity Act

CL rule against perpetuities: contingent interest must vest, if at all, within perpetuity period1) This rule applies across the board, to contingent interests whether legal or equitable, to legal

executory interests (rights of entry), to equitable executory interests (springing and shifting

interests), to personalty and realty, to wills, deeds, and contracts. Thus although legal executory interests and equitable interests can avoid some or all of the common law remainder rules, they will not avoid the rule against perpetuities. So applies to any gift with a condition precedent i.e. contingent. Not concerned with things that are vested – only things which are not vested (i.e. contingent)

2) The idea is to only allow control to 3 generations, including your own (but only 21 years into the lives of that 3rd generation) – the idea being to prevent people from ruling from the grave too far into the future, and to restrict the wealthy trying to keep power in their families forever by restricting the power of future generations from alienating the land. Strikes a balance between desires of the present generation and the similar desires of the succeeding generations. Conversely, the policy of the law was to prevent land from being tied up and withdrawn from commerce, so there is an economic efficiency purpose as well.

3) The Old Rule (now gone) was from Whitby v. Mitchell: If an interest in realty is given to an unborn person, any remainder to his issue is void, together with all subsequent limitations

4) The modern rule (from the Duke of Norfolk case): an interest is only valid if remote vesting is impossible:a) Remote vesting means that an interest may vest after the perpetuity period.b) The perpetuity period is calculated by taking the lives in being at the date the instrument

takes effect (e.g. for a deed on the date it becomes effective, and for a will on the death of the testator), plus 21 years.

5) Alternatively can describe the rule this way: an interest must vest, if it will vest at all, within the perpetuity period. So the rule is not concerned at all with whether or not an interest will vest or whether it will not vest, but rather with when it may vest, if at all. So the mere possibility that it will vest after the perpetuity period makes it void by the common law rule.

6) Irrevocable v. revocable deed: the time a deed takes effect is usually the date it is executed and delivered, but if it is revocable (special clause needed) then it starts when the power of revocation is lost (usually the death of the settlor)

7) Lives in being:a) Must be human lives and not that of animals or corporations.b) Lives in being may be expressed (by designated, rare) or impliedly involved in the gift, and

they need not be beneficiaries.c) In one sense could say this means anyone alive could be used, but this is useless – need an

effective life in being i.e. must have some bearing on the giftd) If no life in being is possible either expressly or implied, the perpetuities period is 21 years

onlye) If the lives in being are a class of persons, only requirement is that they are alive at the date

of the creation of the interest i.e. it must be a closed class. So can’t say “all my children” if I’m still alive and so could still have more children. Note the common law deems both males and females capable of producing children up until their death (the Perpetuities Act has changed this).

f) Any number of measuring lives may be chosen, provided it is reasonably possible to ascertain when the last one dies. If too many lives are chosen the disposition may fail for uncertainty (e.g., the last of Queen Elizabeth’s descendants).

g) If at the creation of the interest there is an effective life in being en ventre sa mere, then that unborn person can be used as a life in being (effectively adding 9 months to the start of the period). Similarly, if a devisee/grantee/beneficiary is en ventre sa mere at the end of the perpetuity period, then that is also ok (so 9 months can be added to the end of the period as well). Note this only works with an actual unborn child in existence – can’t just add 9 or 18

months to the time period explicitly. See definition of “in being” in s.1 of the Perpetuities Act.

8) For an interest to vest (i.e. to not be contingent anymore):a) The rule is not concerned with vesting in possession but rather with vesting in interest (see

definition of “vesting” in s.1 of the Perpetuities Act)b) The person or persons entitled to the interest must be ascertainedc) Any conditions precedent which are attached to the interest must have been satisfiedd) In the case of a class gift (a gift of an aggregate sum to a group of persons uncertain in

number at the time of the gift, who will be ascertained at a future time) the exact share to be taken by each member of the class must be certain (in other words, the class must be closed by the end of the perpetuity period, and any possibility that it will not be makes the whole gift invalid).i) The “all or nothing” common law rule said that if a class was open making remote

vesting possible, the gift was invalid for everyone, even those in class who alone would vest within time – e.g. “grandchildren of A”, if some grandchildren were alive on A’s death they could have been potential beneficiaries, but the class of grandchildren is open on A’s death so none of the grandchildren get anything. However, Andrews v. Partington created a common law class closing rule to get around this: if can interpret the testator’s intention was to close a class after a while, a court can do this to make the gift valid. E.g. “devise to A’s grandchildren” could be taken to mean only those grandchildren alive on A’s death, therefore making the class closed on A’s death, so it can vest on A’s death and so is valid

ii) A gift of a fixed sum to each member of a class is not a class gift because the shares do not vary according to the number of beneficiaries (i.e. to “equally divide between my three children” is not a class gift because each child gets 1/3, and the class is certain).

e) Under common law, there is no wait and see period (the Perpetuity Act changes this). Absolute certainty of vesting must be present at the time when the perpetuity period starts to run.

9) When an interest is invalid for infringing the perpetuity rule it is struck out of the instrument that contains it. Under the general law (but not under the Perpetuity Act) all interests which are ulterior to and dependant upon the invalid interest must also fail. However, an interest is not invalid merely because it is followed by an interest that is invalid

10) E.g. if age to be attained is less than or equal to 21, it is usually okay; if more, red light11) E.g. if the beneficiary is the life in being then it’s likely to be valid

Statute law: the Perpetuities Act – common law rule still applies, but adds a safety net1) The modern version of the common law rule against perpetuities is preserved in B.C. by s.6(1)

of the Perpetuity Act, which took effect Dec 1, 19782) If a gift passes the common law rule then finished, it is valid. But if the gift fails the common

law rule, then the Act will likely validate it i.e. the Act is a safety net, sometimes called the “moron’s charter”, designed to cover people’s mistakes/ignorance of the common law

3) Note that a few things do still slip through e.g. when there is a contingency based on marriage (although s.9 wait and see might help)

4) Some suggest that the common law rule is out of date (created for the 17th century) and that, had the rule not existed, the Act never would have been created in its present form. In some jurisdictions the common law rule against perpetuities has been abolished altogether (such as in Manitoba in the 1980’s). In B.C. a middle ground was chosen (e.g. see s.7 of the Act)

5) Procedure:

a) Start at s.2:i) The Act applies to instruments taking effect after December 31, 1978 (if in a will, takes

effect on death of testator and not on creation of the will, and if inter vivos takes effect on execution and delivery of instrument, or at a date specified in the instrument, or if there is a revocation clause then effective date is when can’t revoke anymore e.g. after death). Note if instrument took effect prior to Dec 31, 1978, might have to consider the old common law rule from Whitby v. Mitchell. So, determine if the Act applies – did instrument take effect after December 31, 1978

b) Now go to s.6:i) 6(2) abolished the old rule from Whitby v. Mitchellii) S.6(1) says, except as provided by this act, the modern common law rule against

perpetuities continues to have effect. So, apply the (modern version of the) common law rule against perpetuities:(1) Divide the gift into its parts i.e. the various interests being given(2) Determine whether each interest is vested in interest (or possession) or contingent

and say why(3) For each contingent interest:

(a) When does the perpetuity period start (i.e. on testator’s death, or on execution and delivery of deed, or on a date specified in instrument)

(b) Who are the lives in being (recall must be alive/ascertainable when instrument takes effect and cannot be an open class)

(c) When does the period end (21 years after the last life in being)(d) What contingencies/limitations does the gift depend upon. Look at each

contingency independently:(i) Can the contingency possibly happen after the perpetuity period has ended –

if yes, then entire gift is invalid by the all or nothing rule (so return to Act to look at the safety net)

c) If the gift is invalid at common law:i) S.7: 80 year period – ok if the interest must vest (either by express terms of the

disposition creating it or by necessary implication of the disposition) within 80 years of it’s creation

ii) Go to s.3 for the order of application of the other remedial provisions of the Act:(1) s.14: capacity to have children – if a question turns on whether or not someone can

have children:(a) s.14(1) presume can only have children if: 14 <= male, 12 <= female <= 55(b) s.14(2) evidence may be given to show that a living person incapable of having

children(c) s.14(5) the possibility that someone may have a child by adoption or legitimation

must not be considered(2) s. 9: wait and see – (under common law, couldn’t do this, had to determine if valid at

fixed time when came into effect) – every contingent interest is not invalid until actual events show the interest is incapable of vesting within perpetuity period(a) S.10 specifies who should be used as the lives in being if s.9 applies:

(i) S.10(1)(a) must use the following people as lives in being, and they must have been alive or conceived but unborn at the start of the perpetuity period

(ii) E.g. s.10(2)(b)(i) since can now wait and see by s.9, can use individual members of a class i.e. not restricted to only classes closed at the start of the perpetuity period

(iii) Also note s.10(2)(c), (d), (e)(iii)(b) Note there is also an interpretation problem: suppose waiting and seeing what

will happen by s.9, and during that time a female goes over 55 years old, is it then possible to go back and apply s.14 to close the class of her children? Currently this is unknown (perhaps not since s.3 specifies order, and as example 19 below shows, this might allow lives in being to change, going against s.10)

(3) s.11: age reduction – if disposition creates an interest contingent upon attainment of an age over 21, and that is what makes the gift violate the common law rule, but would not have been void if age had been 21, then that age specification should be reduced to the nearest age to avoid the violation i.e. reduce by the minimum amount necessary

(4) s.12: class splitting for dispositions:(a) s.12(1) for s.11, if members or potential members of a class prevents s.11 from

saving the gift those persons should be excluded and then s.11 applied (so s.12(1) is no use if there are no ages over 21, but s.12(2) might still be useful)

(b) s.12(2) general, if there are still too many members in class making it void, then those should be excluded as well (note error in legislation: last part “and s.11 has effect accordingly” should read “and the gift takes effect accordingly”)

(5) s.13: general cy pres – discretion of the court to vary a disposition as it sees fit, to make a gift valid when it is invalid solely on the ground that it violates the rule against perpetuities if it can be done within the testator’s intention (which must be ascertainable) – does not save gifts that are invalid for other reasons (e.g. uncertainty)

Examples showing common law rule against perpetuties3) Q3 - devise to A for life, remainder to A’s children for their lives, remainder to B in fee

simplea) s.2 – ok, after Dec 31, 1978b) s.6(1) - apply common law rule

i) 3 gifts(1) A for life = vested in possession(2) B in fee simple = vested in interest (no problem that it is not vested in possession)(3) A’s children for their lives = contingent because A still alive so children an open

class, possible perp problem(a) Period starts on testators death (since says “devise”)(b) Life in being is A(c) Perp period ends 21 yrs after death of A(d) When A dies, A cannot have more children, class ascertained upon A’s death,

thus valid4) Q4 - devise to such of the children of A, a living person as shall attain 21

a) s.2b) s.6(1) - apply common law rule

i) 1 gift, contingent for 2 reasons: age and unascertained class, possible perp problemii) Period starts on testators death (since says “devise”)iii) Life in being is Aiv) perp period ends 21 yrs after the death of Av) When A dies, A cannot have more children, class ascertained upon A’s death, thus valid

5) Q5 - devise to A, a living person, upon attaining 100

a) s.2b) s.6(1) - apply common law rule

i) 1 gift, contingent upon age, possible perp problemii) life in being is Aiii) perp period ends 21 yrs after the death of Aiv) A will either meet contingency or can never meet contingency within 21 yrs of his death

obviously6) Q6 - devise to my children for their lives, remainder to my grandchildren who shall attain

21. At testator’s death he had one living child, C1 and one child en ventre sa mere, C2 born 8 months later. C2 at his death leaves a child en ventre sa mere, G born 8 months latera) s2b) s.6(1) - apply common law rule

i) 2 gifts(1) to my children = vested in possession (testator is dead, so children closed class)(2) remainder = contingent upon age and unascertained class (grandchildren), possible

perp problem(a) life in being is implied children (devise is by will, thus testator dead so children

closed class, i.e. C1 and C2 – can include unborn en ventre sa mere as life in being at start of period)

(b) perp period ends 21 yrs after the death of C1 or C2(c) grandchildren, including G will make 21 within 21 yrs after death of C1 or C2,

thus valid (and allows en ventre sa mere at end of period)7) Q7 - devise to such of my descendants as shall be living 21 years and 9 months from the

death of Aa) Note “to such of my descendants” somewhat unclear – best to avoid such termsb) s.2c) s.6(1) - apply common law rule

i) 1 gift, contingent upon age and unascertained class, possible perp problemii) life in being Aiii) perp period ends 21 yrs after death of Aiv) descendants will not make 21 years and 9 months within 21perp period, thus void ab

initio at common lawd) goto statute (see later examples)

8) Q8 - devise to my eldest descendant living at the expiration of 20 years from the death of the last survivor of all the lineal descendants of Queen Victoria at my death (the “Royal lives” clause – not a good idea)a) s.2 b) s.6(1) - apply common law rule

i) 1 gift, contingent upon age, possible perp problemii) life in being is last survivor of Queen Viciii) perp period ends 21 yrs after death of last survivor of Queen Vic alive on testators deathiv) eldest descendant will make 20 yrs within perp period, thus appears validv) But difficulty with finding all lineal descendants of Queen Vic which leads to

uncertainty, thus may be invalid (not recommended to use such uncertain class of lives in being)

c) Note if found invalid due to uncertainty, could not be saved by s.13 since that section only saves gifts void due to rule against perpetuities (not because of uncertainty)

9) Q9 - devise to my grandchildren who shall attain 21

a) s.2b) s.6(1) - apply common law rule

i) 1 gift, contingent upon age and unascertained class, possible perp problemii) life in being is implied children, devise is by will, thus testator dead and so children

closed classiii) perp period ends 21 yrs after death of childreniv) grandchildren will reach 21 within 21 perp period, thus valid

Examples also showing use of safety net in Perpetuity Act10) Q10 - grant by deed to my grandchildren who shall attain 21

a) s.2b) s.6(1) - apply common law rule

i) 1 gift, contingent upon age and unascertained class (grandchildren), possible perp problem

ii) lives in being cannot be children because a grant is inter vivos which means that the testator is still alive, (and common law says can have children right up to death), so children still an open class and so can’t be effective lives in being, thus testator becomes life in being

iii) grant takes effect on execution and deliveryiv) perp period ends 21 yrs after takes effectv) not all grandchildren will reach 21 within 21 perp period, thus invalid at common law

c) s.7d) s.3e) s.14

i) if life in being, i.e. the testator is a female and is >= 55 yrs old, children can become lives in being because closed class now, and grandchildren will reach 21 yrs within death of parent, thus valid

ii) or, if male or female, can bring in evidence to show incapable of having more childrenf) other sections, see later examples

11) Q11 - devise to the first child of A to attain 30a) s.2b) s.6(1) - apply common law rule

i) 1 gift, contingent upon age and unascertained individual.(1) Note: distinguish between first born (a specific ascertained person) and first child

(unspecific because any existing children could die, so any child can be first to reach 30)

ii) life in being is A (assuming A alive on testators death – if not, A’s children can be lives in being and so valid)

iii) perp period ends 21 yrs after death of Aiv) not absolute certainty that first child to reach 30 within perp period, thus invalid at

common law (but if on their death, A had only one child who was 9 at that time, then it would be valid)

c) s.7d) s.3e) s.14

i) if A is a female and is at time of testators death A >= 55 years old, children can become lives in being become closed class now, and children will obviously reach 30 years within 21 yrs of their own death

ii) or, if male or female, can bring in evidence to show incapable of having more childrenf) other sections, see later examples

12) Q12 - devise to the first grandchild of A to attain 21a) s.2b) s.6(1) - apply common law rule

i) 1 gift, contingent upon age and unascertained individualii) life in being A (or if A dead on testator’s death, A’s children a closed class, so they can

be lives in being and thus valid)iii) perp period ends 21 yrs after death of Aiv) not absolutely certain that first grandchild to reach 21 will be within perp period, thus

invalidc) s.7d) s.3e) s.14

i) if A is a female and is >= 55 yrs old at time of testators death, children can become lives in being because closed class now, and grandchildren will reach 21 yrs within 21 yrs of parent’s death

ii) or, if male or female, can bring in evidence to show incapable of having more childrenf) other sections, see later examples

13) Q13 - devise to A for life, remainder to such of his nephews and nieces as shall attain 21a) s.2b) s.6(1) - apply common law rule

i) 2 gifts(1) A for life = vested in possession(2) remainder = contingent upon age and unascertained class, also interpretation problem

because do we mean only full blood relatives (i.e. children from brothers/sisters who have both same parents as A – assume this meaning)(a) if one of A’s parents dead, lives in being can be A’s brothers and sisters since

class closed, hence valid(b) if both A’s parents alive, then lives in being would have to be A’s parents, who

are presumed by common law to still be able to have children, thus gift invalidc) s.7d) In case of A’s parents alive, s.3e) s.14

i) if A’s mother is >= 55 yrs old at time of testator’s death, her children can become lives in being because closed class now, and grandchildren will reach 21 yrs within 21 yrs of those lives in being’s death

ii) or, for both A’s mother and father, can bring in evidence to show incapable of having more children

f) other sections, see later examples14) Q14 - devise to A for life, remainder to the first child of A to marry (Factual background: A

is married and has five children, two of these children have made plans to marry within the next 6 mos)a) s.2b) s.6(1) - apply common law rule

i) 2 gifts(1) to A = vested in possession

(2) remainder = contingent upon marriage (unless one of A’s children already married on testator’s death)(a) life in being is A (unless A dead on testator’s death, then A’s children are lives in

being and so valid)(b) perp period ends 21 yrs after death of A(c) cannot say with certainty that a child will get married within perp period because

they might change their mind, or die, this invalid at common lawc) s.7d) s.3e) s.14 doesn’t helpf) s.9 wait and see – will wait to see if one of A’s children marries within 21 years of A’s

death, so still possibly invalid – note that marriage can slide through the safety net (only effective life in being with marriage is usually the person who has to marry themselves)

g) other sections, see later examples15) Q.15/16 - devise to A for life, remainder to his first child to marry, provided he or she

marries within 60 yrs of my death (Q16: by Dec 31, 2040)a) s.2b) s.6(1) - apply common law rule

i) 2 gifts(1) to A = vested in possession(2) remainder = contingent upon marriage, age and unascertained individual

(a) life in being A(b) perp period ends 21 yrs after death of A(c) uncertain if first child to marry within 21 yrs of A’s death, thus invalid

c) looks like s.7, perp period can be 80 yrs, thus time limit of 60 years/by 2040 saves it17) Q17 - devise to A for life, then to A’s children for their lives, remainder to A’s

grandchildren at 21. Factual backgound: A is female, 60 yrs old at death of testator, has five children but no grandchildren. What is the position if A is male?a) s.2b) s.6(1) - apply common law rule

i) 3 gifts(1) to A = vested in possession(2) then to A’s children = contingent because open class (assuming A alive on testator’s

death)(a) life in being A (A still alive, A’s children open class so can’t use them as lives in

being)(b) perp period ends 21 yrs after death of A(c) class of children will become closed on A’s death, so valid

(3) remainder = contingent upon age and unascertained class (grandchildren)(a) life in being A(b) perp period ends 21 yrs after death of A(c) uncertain whether grandchildren will reach 21 during perp period, thus invalid

c) s.7d) s.3e) s.14

i) A is > 55, thus children are closed class, can use them as lives in being, grandchildren can then reach 21 within 21 yrs of parent’s death, thus valid

ii) if A is a male, this section doesn’t help you unless have evidence to show incapable of having children

f) other sections, see later examples18) Q18 - devise to A for life, remainder to his widow for life, remainder to such of his children

as are alive at his widow’s deatha) s.2b) s.6

i) 3 gifts(1) to A = vested in possession(2) remainder to widow = contingent, don’t know who widow is because A can divorce

beforehand and remarry (and this gift and the next will be invalid if there is no widow i.e. A unmarried on his death)

(3) remainder to children = contingent unascertained class ii) life in being Aiii) perp period ends 21 yrs after death of A

(1) remainder to widow valid because she will be immediately known on A’s death(2) remainder to children:

(a) will only be valid if widow can be a life in being (since widow may die more than 21 years after A’s death) – children can’t be effective lives in being since A still alive, so children an open class

(b) But don’t know if widow alive on testator’s death (A may later marry younger woman) – “principle of the unborn widow” – so widow cannot be a life in being

(c) Thus possibility of vesting outside perp. period, and at common law could not wait and see if the widow was alive on the testator’s death, so invalid

c) s.7d) s.3e) s.14 - no help because A is a male (unless evidence to show he can’t have children, in which

case children could be lives in being)f) s.9 wait and see

i) s.10(2)(e)(iii) specifies widow as a life in being, whether or not she was alive or ascertainable at death of testator, hence valid (i.e. gets around the common law problem of the unborn widow)

19) Q19 - devise to A for life, remainder to such of A’s children to reach 25. Factual background: at the death of A she was survived by a child aged 2 yrsa) s2b) s.6

i) 2 gifts(1) to A= vested in possession(2) remainder = contingent as to age an unascertained class

ii) life in being A (unless A dead on testator’s death, in which case children are a closed class, so can be effective lives in being, therefore valid)

iii) perp period ends 21 yrs after death of A, but a young child born within 3 years of A’s death would not reach 25 within perp. period so possibility of remote vesting, thus invalid at common law (note can’t wait and see to find out how old A’s children are on A’s death, must do this analysis at time of testator’s death)

c) s.7d) s.3

e) s.14 – no help (unless can show at time of testator’s death: A female and over 55, or can show A can’t have more children, then children can be lives in being, hence valid)

f) s.9 wait and seei) determine lives in being from s.10

(1) can A be statutory life in being? Yes, by 10(2)(b(i)) and (c)(2) can child be statutory life in being? Was child alive at death of testator s.10(1)(a) –

if yes, then it can qualify under s.10(2)(b)(i) so gift is valid, if no, then can’t, so continue

(3) note interpretation problem of s.9/s.14 comes up here – if during waiting and seeing, A (assume female) turns 55, so children become closed, can we now say those who were alive on testator’s death are lives in being - unknown

ii) after wait and see, get to A’s death, find out 2 year old child, so will not attain 25 within 21 years of A’s death, so still invalid

g) s.11, reduce age from 25 to 23, thus valid20) Q20 devise to A for life, remainder to such of A’s children to reach 25 and to the children

of such of A’s children who die under 25 leaving children who attain 25 (such children to take the share their parent would have taken). Factual background: A was alive and unmarried (= no children) at the death of testator, he married two years after the death of testator and subsequently had three children C, D, and E. A and his wife die together in an air crash. They were survived by C (18 yrs), D (17 yrs), and E (2 yrs)a) Note this contains a substitution clause – if the children die then their children are

substituted in their place i.e. there is no separate gift to the grandchildren hereb) s.2c) s.6

i) 2 gifts(1) to A = vested in possession(2) remainder to children who reach 25 with substitution to their children on reaching 25

if they don’t (contingent upon age, unascertained class)ii) life in being Aiii) perp period ends 21 yrs after A’s death, but children and grandchildren cannot reach 25

within perp period, thus invalid at C/Ld) s.7e) s.3f) s.14 - no help because male (unless can show he couldn’t have anymore children, in which

case his children would be a closed class and hence could be lives in being)g) s.9 wait and see

i) s.10 statutory life in being can be A and his spouse if she were alive on testator’s death by s.10(2)(c), note none of children were alive on testator’s death

ii) Waiting and seeing doesn’t help since when get to A’s death find that not only interest to child E might vest remotely, but also any of C, D or E might die, leaving a child, and that child will then vest very remotely

h) s.11 – no help because of grandchild substitution, and reducing any of the ages to 21 still allows gift to grandchildren to vest remotely

i) s.12(1) class splitting – since it is the grandchild substitution causing the problem, if remove potential grandchildren from the class of potential beneficiaries, then can make the whole thing valid by returning to s.11 and reducing the age requirement on the children to 23 (since E is 2 already)

j) Now consider changing the facts: at the death of the testator, A was alive, unmarried with child C (1 year old at death of testator). A and wife die in air crash. Five years after the death of A, D dies leaving a child D1 aged 1 year at D’s deathi) s.2ii) s.6

(1) same result in common lawiii) s.7iv) s.3v) s.14vi) s.9 wait and see

(1) s.10 statutory life in being can be C because of 10(2)(b)(i), thus valid for C because C will turn 25 within 21 years of their death (like Q5). So may be able to apply the common law class closing rule from Andrews v. Partington (i.e. close the class to make the gift valid) at the beginning i.e. on testators death. this point. However, it is unclear whether this common law rule can be applied while waiting and seeing under the statute.

(2) Note s.10(2)(c) could potentially allow spouse to be a life in being, but she died in air crash too

21) Q21 - devise to the grandchildren of A who reach the age of 21. Factual background: at the death of the testator A was alive but was unmarried and had no children. A later married and had 3 children. At the date of A’s death he was survived by his 3 children and 2 grandchildren aged 4 and 2a) s.2b) s.6

i) 1 gift, contingent upon age and unascertained classii) life in being Aiii) perp period 21 yrs from A’s death, invalid at common law since more grandchildren

might be born after A’s deathc) s.7d) s.3e) s.14f) s.9

i) s.10 – A only statutory life in being 10(2)(d). Children cannot be, even if wait and see, because not alive on death of testator, as required by s.10(1)(a)

ii) When get to end of wait and see i.e. at end of last statutory life in being i.e. on A’s death here, still invalid because still open class of grandchildren (unless can go back and use s.14 to show the two young children cannot have children themselves)

g) s.11 – no helph) s.12

i) s.12(1) – no help because s.11 not applicableii) s.12(2) – after waiting and seeing, more grandchildren can presumably still be born and

they obviously will not turn 21 within 21 years of A’s death, so cut them out to validate the gift for the 2 living grandchildren on A’s death

Incorporeal interests

Introduction: distinguish contracts (don’t bind future owner) from incorporeal hereditaments1) Incorporeal interests = an intangible right/obligation in relation to land but not the land itself and

does not give a right to possession of that land. However, still recognized and protected by law as proprietary.

2) Must distinguish purely contractual relationships (which are between the contracting parties only (privity to contract) and so unenforceable on third parties) from things that perhaps start out as contracts between two land owners say, but that become attached to the land (a bit like a fixture) and so run with the land, thus binding a future owner to what was agreed upon between the previous owner and someone else. These latter things are property, called incorporeal hereditaments.

3) The main types of incorporeal interest:a) Easements e.g. a right of way. Can bind third parties (i.e. subsequent owners)b) Profits a prendre i.e. a right to enter land and take something from it, e.g. minerals, timber,

crops. Can bind third parties (i.e. subsequent owners)4) Covenants e.g. a right to prevent a neighbour from operating a pig farm. After Tulk v. Moxhay

may bind third parties (i.e. subsequent owners) if they had notice5) Licenses i.e. a right to do something on someone’s land that would otherwise constitute trespass.

Generally cannot bind a third party (i.e. subsequent owner) but change may be occurring similar to that in Tulk v. Moxhay for covenants

Easements1) Easements are registered as a charge on the land, and are generally enforceable against 3rd

parties i.e. considered proprietary at law, running with the land2) Two types:

a) Positive easements – gives the owner of the land benefited (dominant tenement) the right to enter the land burdened (servient tenement) for some purposei) E.g. a right of way to pass over another’s landii) I.e. a right to use the land of another in a particular way, but that is short of possession

and that does not include the taking anything away (would be profit a prendre)b) Negative easements – do not confer a right to enter onto the servient tenement, but restrict

the owner of the servient tenement in his/her use of it in a way which benefits the dominant tenementi) E.g. the servient tenement owner agrees to refrain from building structures that would

interrupt the light or air from reaching the dominant tenement3) Negative easements are similar to restrictive covenants, but there are differences:

a) Negative easements are more restricted in what subject matter they can cover, whereas restrictive covenants can cover a broader range of things (including new things) since has other safeguards (Phipps v. Pears)

b) Negative easements limited to matters that can be the subject matter of a grant, whereas restrictive covenants can be made simply by agreement

c) Negative easements can be legal and equitable, whereas restrictive covenants can only by equitable

d) Negative easements bind third parties even without notice, whereas restrictive covenants cannot bind without such notice

e) Negative easements are subject to prescription, but not with restrictive covenants which must be by agreement and requires notice (prescription = after some period of peaceable,

uninterrupted, non-secret use an easement can be created, such as right of support for buildings or light, although note presecription doesn’t apply in land title jurisdictions)

f) Easements are created by a grant, whereas covenants are made by an agreement under seal4) Distinguish easements from natural rights (i.e. riparian, support, accretion perhaps) which come

as part of the land itself, and therefore corporal hereditaments5) Distinguish easements from public rights such as public rights of way (i.e. paths that everyone

can use) across private land. Easements are between a dominant and servient tenement – they can’t be used by anyone

6) These questions about easements were consolidated/rationalized in Re Ellenborough Park, (1956) (English C.A.)a) Facts: homes were built around Ellenborough Park. The original conveyances for each home

lot were in fee simple together with certain easements for the “full enjoyment in common with other persons with similar easements of the Park subject to fair and proportionate costs of maintaining the Park”. The vendors in return held covenants to maintain the park and not to build upon it. During world war II, the property was taken away for war purposes, and compensation was paid out. The question concerned who should get this compansation – if there were valid easements, then the surrounding home owners would have a proprietary interest in the park, and so should get part of the compensation.

b) Issue: Do the owners of the lots have any enforceable rights over the Park?c) Decision: The lot owners had enforceable easements which were annexed to the land. There

are a number of legal requirements for an easement:i) There must be both a dominant and a servient tenement, distinguishing an easement

from a public right, where there is no dominant tenement i.e. an easement is in favour of some other land (the dominant land) and the owner of that land (although dominant tenement not necessary for government entities and certain corporations, see statutory right of way in s.218 Land Title Act, see below)(1) In this case the surrounding houses were the dominant tenements.

ii) An easement must objectively benefit (i.e. accommodate) the dominant tenement i.e. the right granted must inherently benefit the dominant tenement land itself, so the nature of the right and the nature of the dominant tenement will be relevant i.e. it will be a question of facts(1) I.e. the granted right must be connected with the normal enjoyment of the dominant

tenement, and not just a perk to the particular present occupier i.e. like with fixtures, it must benefit the land as land. E.g. a promise to buy tickets for the dominant tenement owner to see Lord’s cricket matches would only benefit those dominant tenement owners that enjoy cricket, and so is not connected to the land)

(2) Increasing the value of the land is a mere factor that may help show this, but is not determinative

(3) It is a question of fact: in this case the nature of the dominant tenement was residential property and the nature of the right was as an ornamental garden or pleasure ground. This is something that would objectively benefit the dominant tenement, much as a garden does for a house

(4) This benefit must also be sufficiently proximate, although not necessarily adjoining. In this case ok since the houses were close, even if they didn’t all front onto the park

iii) At common law, the dominant and servient owners must be different persons (although s.18(5) & 18(7) of the Property Law Act has abolished this requirement – see below)

iv) Must be proper subject matter to form an easement grant:

(1) Must be sufficiently defined and sufficiently certain - it can’t be too wide or too vague (in this case the right was to “wander in the garden”, as opposed to a distinct path/right of way, but since this was limited to a few houses in a close and defined area shaped in a crescent around the park it wasn’t considered too vague i.e. it wasn’t just uncontrolled wandering for anyone)

(2) It must be consistent with the servient tenement owner’s right of possession. I.e. something that gives a right of occupation cannot be an easement (e.g. right to dump on the property or to put in a car park or to cut down trees would be no good) although can get easements to lay pipes or overhead cables, and could argue this would affect possession (i.e. space now taken up that can’t be used)

(3) Previous cases had suggested an easement must possess a quality of utility or benefit and not mere recreation, but this case overruled this and allowed an easement for mere recreation, although the court did say if this element is still required this case is still an easement since parents walking children in prams is not mere recreation. That this requirement for utility/benefit is not required was upheld in Dukart v. Surrey

v) The parties who made the arrangement must have had the ability to act as the giver and receiver of the grant

vi) There must have been an intention for it to run with the land and bind future parties i.e more than a private contractual arrangement, giving a personal privilege for one of the original parties. In this case yes, said “for successive title”.

7) Re Ellenborough Park was followed in Canada in Dukart v. Surrey, (1978) (S.C.C.)a) Facts: D acquired some land through a tax sale, and proposed to erect a John Crapper on the

land. The land lay just before the foreshore at the water of the bay. The building would interfere with P’s view and her access to the foreshore. P’s title was rooted in the original 1912 plan which recited that the foreshore reserves were to be held by the grantor for giving access to the shore for the purchasers of other lots. All of the conveyances sold in trust in 1917 were subject to the restrictive covenants of the original plan.

b) Issue: Did P have valid easement over the reserves, and if so should it be restricted?c) Decision: success for P, easement granted.

i) As long as the four requirements of an easement are met (from Re Ellenborough Park) then a right to move upon another’s land can be considered an easement and therefore runs with the land.

ii) Giving access to water is sufficient as a utility or benefit. So are leisure and recreational purposes.

iii) Giving access rights to other people as well and the grantee (i.e. a private right that overlaps with a public right) can still be ok as an easement (as in this case), although a completely public right might not be allowed

8) The difference between positive and negative easements, and the restrictions on subject matter for negative easements was laid out in Phipps v. Pears, (1965) (C.A.)a) Facts: New house built very close to old house, but without touching. The new wall wasn’t

completely weatherproof, so when the municipality ordered D to pull old house down, the new wall of the new building was left exposed to the weather, & frost caused it to crack. P, owner of new building, sued D for damages, claiming he’d acquired an easement by prescription to protection from the weather i.e. P claims a negative easement, right to stop neighbour from doing something on his land, namely pulling down the old house

b) Decision: Judgement for D – there was no easement.i) For policy reasons there is no easement by which a dominant tenement can be protected

from the weather. If such easement were to be permitted, it would unduly restrict a

neighbour from the use of his land. The only way for an owner to protect himself from the weather is to get a restrictive covenant from his neighbour, which would be binding in contract and would be enforceable against third parties (subsequent owners) provided there was notice.

ii) While courts have been willing to apply positive easements to new technology and expand the allowable categories, they have been very cautious when it comes to negative easements, and it is unlikely that they will expand the categories since they hamper titles and development, limit neighbours in their use of land, can bind 3rd parties automatically, can appear by prescription (although prescription has gone in B.C.), etc

iii) Cannot get a negative easement for (but note these situations can be covered by restrictive covenants, which have safeguards, namely that notice must be given to third party and prescription does not apply):(1) Obstruction of view(2) Receive wind in an undefined channel (however, can get a negative easement for air

flow in a defined channel, such as a ventilation shaft to a cellar)(3) Sun (not in a “shaft”), shade(4) Protection from weather (as in this case)

9) Statute Law:a) Today easements (in order to bind future owners) must be registered as a charge on servient

land and noted on the dominant land (but just because registrar accepted them as easements doesn’t mean they are easements, that’s up to the court). Although recall s.29 of the Land Titles Act concerning unregistered interests

b) B.C. Land Title Acti) s.218(1) – A person may create an easement without a dominant tenement, to be known

as a statutory right of way, for any purpose necessary for the operation and maintenance of the grantees undertaking. The grantees may be the Crown, a Crown corporation, municipality, public utility, pulp/timber corporation, etc.

ii) s.218(2) the rule requiring an easement to have both a dominant and servient tenement is abrogated as far as subsection (1) requires

c) B.C. Property Law Act (overturns common law requirement that owners of the dominant and servient tenements be different persons):i) s.18(5) – the owner in fee simple (or owner of a registered lease or sublease), may grant

to himself an easement or a restrictive covenant over land that he owns for the benefit of other land that he owns (registered). This grant must be consistent with the interests held by him as grantor and grantee at the time of the grant.

ii) s.18(7) – common ownership of the dominant and servient tenements does not extinguish an easement; in other words they no longer have to be two separate owners of different lands.

Profits a Prendre: to take part of land, has implied right of entry, can be in “gross”1) A profit a prendre is an incorporeal hereditament i.e. it is proprietary, and it is binding on 3rd

parties.2) It confers a right to sever and take from a servient tenement part of the natural land, such as

minerals, crops, ferae naturae (subject to the Wildlife Act), fish, etc. (but must be part of the land – can’t take tricycle). The thing taken must be susceptible to ownership, therefore it doesn’t include water (a right to water cattle, for example, would be an easement, not a profit)

3) It carries with it:a) The right to remove and take from the land the designated products or profit

b) An implied right of entry (by license)c) A right to use as much of the surface as is necessary/convenient for the exercise of the profit

4) Unlike an easementa) A profit can be granted in “gross” i.e. there need be no dominant tenement.b) A profit does give a right to possession since it gives the right to sever and take, although in

reality the thing taken has changed to personalty, therefore, strictly speaking, not a right to possession.

Leases: exclusive occupation (not for licensee), privity of estate “touch and concern” land1) A lease gives exclusive right of occupation, but is not a freehold. A lease has terms and duration

which must be certain (e.g. monthly tenancy)2) Privity of estate: e.g. when a tenant T1 assigns down (through assignment or substitution, not

subleasing) to T2, T2 and landlord have no privity of contract but landlord can still enforce terms of lease on T2 through privity of estate. Similarly if landlord assigns their interest to another (new landlord)

3) Recall with subleasing, like old subinfeudation, you keep yourself in the chain, so this is not privity of estate

4) Privity of estate relates only to those terms in the lease which touch and concern the leased property – any terms of original lease that are purely personal between parties do not bind new parties

5) Boundary between lease and license is blurry e.g. a lodger in a boarding house is a licensee, but a tenant is a lessee – the difference is a licensee does not have an exclusive right to occupy

Covenants intro: contract-like, if privity of contract or estate (touch/concern) binds 3rd parties1) Incorporeal hereditaments are proprietary i.e. they run with the land. Covenants are not really

incorporeal hereditaments – more akin to contracts (although they pre-date contract law by several 100 years). Covenants historically required to be under seal, but no need anymore except for corporations. A restrictive covenant is a promise/agreement that the covenantor will not do something in respect of the servient land. Similar to negative easements

2) If there is privity of contract it is binding i.e. if the parties who originally made the covenant are involved, the covenant is enforced as a contract.

3) If no privity of contract but there is privity of estate (a proprietary concept which occurs in leases where the tenant or landlord assigns their interest to someone else) covenant is enforceable between new parties as long as the contractual terms “touch and concern” the landa) e.g. if tenant T1 covenants to come and clean the landlord’s apartment, if T1 assigns their

lease to T2, then it is not enforceable against T2 since does not “touch and concern” the land4) If neither privity of contract nor privity of estate, there are differences between the common law

and Equity (see cases below)a) At equity:

i) Includes benefits running with the landii) After Tulk v. Moxhay, burden can also run with the land i.e. a restrictive covenantiii) Thus needs both a dominant and servient tenementiv) Notice required for successive owners to be bound (Tulk v. Moxhay) and also

registration (s.29)v) Need an intent by original parties that it should run with the land

Covenants & Common Law1) Smith & Snipes Hall Farm v. River Douglas Catchment Board (1949) (C.A.)

a) Facts: Mrs Smith and 10 others were owners of land in fee simple that was subject to flooding. They (the original covenantees who owned the dominant tenement) entered into contract with original covenantor D, under seal, that D would take steps to prevent flooding, and in return the owners would contribute to the costs of the work (so note no servient tenement here, only a dominant tenement). Mrs. Smith transferred her interest to Bruce Smith and Snipes leased the land from him. The transferor (Mrs. Smith) purported to assign the benefit of the agreement to Mr. Smith. The land flooded. Trial court found D negligent in its work and in breach

b) Issue: Can P sue with respect to this breach?c) Decision: The covenant was binding and D was in breach. Common law rules:

i) Only the benefit of a covenant can run with the dominant tenement - so subsequent 3rd party owners of that dominant tenement can enforce it, but a burden cannot (so only original covenantor i.e. first party to agree to burden, is bound)

ii) So needs a dominant tenement and the covenant must “touch and concern” the dominant tenement/land (as opposed to being purely personal)

iii) It must have been the intention of the original parties that their arrangement would run with the land

iv) No need for a servient tenement since there is no burden which runs with the land (burdens affect a servient tenement). Thus the covenant does not have to be connected in any way with the covenantor’s land. So courts can hold that the benefit of a covenant runs with the land of the covenantee, while the burden of the same covenant does not run with the land of the covenantor.

v) Dominant land has to be benefited (accommodated)vi) No notice is required for benefit to run with the landvii)Must expressly identify dominant land, by extrinsic evidence if not in deedviii) The covenantee (holder of dominant tenement) at the time of making the contract

had to have legal interest in the land benefiting, and the assignee of the covenantee who seeks to enforce the covenant has to have the same legal estate as the original owner E.g. if original covenantee held in fee simple, but subsequent holder had leasehold, could not enforce benefit (no longer the law – can hold different interests)

2) Austerberry v. Oldham Corporation, (1885) (Ch. Div.)a) Facts: A group of landowners agreed to build a road, and transferred the necessary lands

over to a trustee, who undertook to build and maintain the road and agreement was to bind successors. P, a successor in title to one of the original owners, refused to pay maintenance charges with respect to the road, which were imposed by D, successor in title of the trustee. Although P refusing to pay towards road, sues D for repairs wanted to road

b) Decision: P was not required to pay the charges because:i) At common law, for a covenant to run with the land, it must “touch and concern” the

land / it must benefit P’s land(1) Lindley, J: covenant to keep in repair as “public” highway, nothing in covenant

points to P’s land in particular, no clear benefit in deed that benefits P’s land, so not sufficiently linked with the land.

(2) Fry, J: deed intended to benefit and run with P’s land and did benefit the land as landii) At common law the burden of a covenant does not run with freehold land so as to bind

the successors in title – only the benefit can pass. In this case obligation to pay is a burden so cannot pass to successors i.e. P

c) Comment: the court did not use equity to solve the problem (i.e. Tulk v. Moxhay) because it was a positive covenant here (and not a landlord and tenant case, therefore no privity of estate.)

3) Halsall v. Brisell, (1957) (Ch. Div.)a) Facts: Similar facts as in Austerberry. The original owner of a house entered into a trust

deed in 1851 whereby he agreed to pay towards the costs of P for the maintenance and upkeep of roads and sewers. The owner sold to D with notice, who then rented it out. P attempted to increase charges for multiple family dwelling in 1950.

b) Decision: D need only pay on the terms of the 1851 agreement.i) Obligation to pay is considered a burden, and burdens are not generally enforced against

subsequent owners.ii) But, if you have such an unenforceable covenant, yet you still want to take the benefits

(of the road and sewers in this case), you have to take the burdens/obligations as well (pay in this case)

iii) So although D not required to pay at all (since a positive covenant doesn’t run with the land), cannot rely on necessity or prescription to give him a right to take the benefits of the covenant unless willing to pay the burden as well.

iv) Taking a benefit in the past does not mean you have to pay the burden in the future, if you no longer want the benefit

4) Parkinson v. Reid, (1966) (S.C.C.)a) Facts: In 1926 owners of adjacent lots entered into an agreement under seal, whereby a

staircase being built on one lot could also be used to get to the second floor of the other lot. The grant gave the covenantees, their heirs and assigns, free, uninterrupted use and right of way on the staircase. The covenantors agreed to repair and in the case of destruction, replace the staircase. In a separate agreement, the covenantor was given the right to use the adjoining wall as a party wall. In 1961 a fire destroyed the building and staircase, and P sues for reconstruction.

b) Decision: Covenant unenforceable.i) Affirmative covenants requiring the expenditures of money or the doing of some act

such as the repair and reconstruction of a stairway (i.e. a burden) do not run with the land in law or in equity, and so is not enforceable against a successor in title of the servient tenement where there is no privity of estate.

ii) Added to the rule in Halsall that if you no longer need the benefit, your use of the benefit in the past doesn’t imply you are bound by the burden anymore (i.e. just because used the wall in the past, if no longer want to then no longer have to pay). So only bound by burden as long as you take the benefit.

Covenants & Equity: will bind burden if negative, benefits dominant tenement, and notice1) In Equity we see recognition of agreements between private parties becoming entirely

proprietary and so running with the land and binding subsequent owners, and so have the same result with restrictive covenants as with negative easements. The elephant (breakthrough) case was Tulk v. Moxhay, and then subsequently came LCC v. Allen (the tiger) which provided a rational basis

2) Tulk v. Moxhay, (1848) (Ch. Div)a) Facts: In 1808, P sold his garden plot in fee simple, and the conveyance contained a

covenant (for the heirs, executors and assigns) that the purchaser would, at his own cost, maintain the garden as a “pleasure ground” and not build upon it (a burden). In return, the tenants of the square could purchase a key for the privilege of admission to the garden. The

purchasers successors bought the land with notice of the covenant, but they (D) wanted to build on the garden.

b) Decision: Appeal dismissed, injunction remains in force.i) A covenant between a vendor and a purchaser on the sale of land, that the purchaser and

his assigns shall not use the land in a particular way i.e. a burden, will be enforced in equity against all subsequent purchasers with notice of covenant, independently of the question of whether or not the covenant runs with the land at law, because it would be unconscionable to allow the third party subsequent purchaser D to refuse to acknowledge the covenant of which they had notice (and court said the price reflected the fact that D couldn’t do anything with the land i.e. if D were now allowed to develop it would be unjustly enriched)

ii) Court seemed disinterested in whether there was dominant or servient tenements, and in whether it was a positive or negative covenant. Court was only concerned with notice, and with such notice, the subsequent (3rd party) buyer is treated equal to the vendor (enormously broad doctrine)

c) Comment:i) Breakthrough case allowing a burden/enforcement to move to subsequent 3rd parties by

Equity, but didn’t discuss doctrine of running with land nor did it set out analysis or principles (court in LCC v. Allen below tries to clear up this area of law)

ii) No mention of whether this is a negative or positive covenant.3) London County Council (LCC) v. Allen, (1914) (C.A.)

a) Facts: Allen, a builder, applied to the P for permission to lay out two streets. The permission was granted subject to the covenant that Allen would not build on certain other properties that he owned, so that the property could eventually be used to continue the streets. D, successor in title to Allen, built on the property and P wanted the buildings removed. D had notice of the covenants, but P had no land in the vicinity.

b) Decision: For D, the covenant was not enforced. i) Noted that by Haywood (1881) (C.A.) refused to extend Tulk v. Moxhay to anything

that was positive – Equity only attaches to the owner of the landii) There is no dominant tenement in this caseiii) There is an equitable proprietary interest in which the burden from a covenant runs with

the land and so binds successive 3rd party title holders if:(1) The enforcers of the covenant have a dominant tenement that the burden was made

to benefit/accommodate (i.e. touches and concerns the dominant tenement) – so a dominant tenement is now required i.e. similar now to a negative easement, although negative easements are still more restricted due to prescription (recall Phipps v. Pears)

(2) There must be a common intention that the burden shall run with both lands(3) The covenant is negative in substance i.e. restricting only the mode of using the land

(so if it involves the expenditure of money it is positive and so will not bind), and(4) The successive title holders of the servient land had notice (which overcomes effect

of legal estate)c) Comment:

i) Thus the only one who escapes the burden is a successive legal estate holder, bona fida purchaser for value without notice

ii) If the purchaser took only an equitable estate, he took it subject to the burden whether or not he had notice

iii) The benefit should be for the use and occupation of the land, not for financial interests. (Canada Safeway v. Thompson)

Creation of Covenants: need to register them, but being registered doesn’t prove them1) B.C. Land Title Act

a) s.219(10): Just because a covenant is registered under s.219 does not necessarily mean that it is enforceable i.e. the regular tests still need to be done

b) S.221(2): Just because a restrictive covenant is registered doesn’t mean it is a restrictive covenant or that it is enforceable

c) s.29(1): Notice:i) Where there is no fraud, no purchaser shall be effected by express, implied, or

constructive notice of an unregistered interest or charge (includes covenants) on land except:(1) An interest, the registration of which is pending(2) A lease, or an agreement for lease for a period not exceeding 3 years where there is

actual occupation;ii) notwithstanding the rule in law or in equity to the contrary. (In other words, only

registered covenants are binding, and the equitable doctrine is overruled).

Licence: permission for licensee to do otherwise illegal thing on licensor’s land, differs lease1) A permission given by one person (licensor – burdened) to another (licensee – benefited)

allowing the latter to do something in relation to land that would otherwise be unlawful. So a license is purely a personal right against the licensor, and it does not pass any interest nor does it alter or transfer property in anyway. The permission may be given gratuitously or for value.

2) There is a potential that licenses will be expanded in the future, just as with covenants in Tulk v. Moxhay

3) Most commonly is license is granted to allow trespass to land.4) Compared with leases:

a) E.g. lease an apartment, but only a licensee if a bodger/border in someone’s homeb) Leases give a leasehold estate in land, whereas licences just give a personal right to be on

the land (both can give a possessory right)c) A lease, being a non-freehold estate, requires a certainty of term (either through express

stipulation or a certaining mechanism e.g. month-to-month where lease is started and ended each month), whereas a licence need not have a certainty of duration (generally can be revoked at any time)

d) A leaseholder can bring an action for trespass (even against landlord in most situations since leaseholder has exclusive possession i.e. they are the occupier), whereas a licensee can not because they don’t have exclusive possession (e.g. a lodger, who is considered a licensee, would have to ask the licensor/owner to exclude an intruder)

e) Today, in some jurisdictions, a lease must be in writing, whereas a licence does notf) To determine whether a leasehold or a license has been created, the intention of the parties is

important: ask if they intended to give an estate in land (i.e. a lease) or just allow someone to be there (e.g. consider someone in possession for their employment, such as a lighthouse keeper, then employer is the occupier and employee is licensee)

Licenses: Bare, coupled with land interest (e.g. profit), and new irrevocable contractual1) Hounslow London Borough Council v. Twickenham Garden Dev. (1971) (English Ch. Div)

a) Accepted in Canada

b) Facts: D contractor was employed by P to carry out extensive construction work on a 27 acre site. A condition of the contract empowered P, on certain preconditions being satisfied, to terminate the contract. P tried to terminate the contract under this condition, but D insisted upon continuing the work. P sought damages for trespass and an injunction to stop further trespass.

c) Decision: Judgement for D. No injunction granted.i) Bare licence: traditional common law view

(1) E.g. simple consent to be on land so defence against trespass, revocable at any time but must give reasonable time to depart land (e.g. to walk off if license allowed walking across land, or to remove a building if license allowed construction of a building on land).

(2) Since revocable, licenses do not bind a successor (i.e. subsequent purchaser of the land).

(3) If arising from a contract, if license is revoked can sue for breach of contract:(4) E.g. Wood v. Leadbitter: ticket holder turned out of racecourse even though had

ticket to be there. Licence could be revoked at any time and ejection from land can be enforced by force. However, P can sue for contract breach (i.e. damages = the ticket price). This case now largely, if not wholly, ceased to be binding.

(5) E.g. Thompson v. Park: one schoolmaster gave another a licence to teach in the same building (during World War II buildings scarce). Following a dispute, the 2nd schoolmaster is kept out, but he forcibly re-enters. Injunction is granted to keep 2nd schoolmaster out despite breach of contract by 1st schoolmaster.

(6) Common law could only award damages (did not have the equitable powers of injunction and specific performance), so no point in trying to call a license irrevocable since only remedy still would be damages. After the Judicature Acts 1873/75 when common law and equity courts were each given the power to make orders from the other, this limitation no longer applied

ii) Licence coupled with an interest in land e.g. a profit-a-prendre (i.e. a right to take from the land) has a licence to enter that land coupled to it. Irrevocable for the term of the interest (e.g. profit). Since a profit a prendre binds a 3rd party (successor), by implication they are bound by the license as well. To make licenses irrevocable, the notion of “interest in land” was expanded to get around the common law revocability:(1) Hurst v. Picture Theatres said that a movie goer had a right to see a performance,

which amounted to an interest in the land.(2) Vaughan v. Hamson similarly made right to attend creditors meetings an interest in

land(3) Hounslow critical of this approach of including a miscellaneous collection of rights

i.e. seems absurd calling things an “interest” just so as to be able to come up with an irrevocable license: “there ought to be no need to torture the word ‘interest’, rather we should recognize a third [middle ground] category of license”.

iii) Licence coupled with a contract (a “contractual license”, the middle ground created here in Hounslow):(1) WinterGarden: license to use a theatre for plays – case turned on contractual issue of

whether the licensor could revoke the contract (English H.L. said yes, could be revoked). But in dicta said that if the license had been granted pursuant to a contract, need to first interpret the contract and ask if it gives the power to be revoked (if so, then so too can the license). But if contract irrevocable and tied up with it is a license, then the license is irrevocable as well.

(2) Equity used to develop this idea here in Hounslow: if the contract is irrevocable, a license set up by provisions in the contract is also irrevocable, and can be enforced with equitable remedies (injunctions, specific performance):(a) If the licensor is threatening to revoke, equity would grant an injunction stopping

them from revoking,(b) If the revocation has been declared by licensor but not yet carried out, the

carrying out can be enjoined by injunction,(c) If revocation already carried out, did not say whether could get an order of

specific-performance to get the license back (generally Equity more comfortable ordering injunctions to stop revocation than ordering positive action as would be required here),

(d) If licensor asks the court to help remove a licensee, if contract is irrevocable Equity won’t help i.e. Equity won’t aid in the breach of a contract. Note this conflicts with Thompson v. Park above, but that case was distinguished since it involved forcible and riotous re-entry, and Equity can be used to stop such violence

(3) Note that none of this applies to third parties (i.e. successors to licensor) – it just applies to the original licensor and licensee

3rd party successor bound by license unless bona fide purchaser for value without notice1) Errington v. Errington & Woods (1952) (C.A.)

a) Facts: Father in law puts down money for a house. Title in his name. Lets son and daughter-in-law live there saying that it will be theirs when they finish paying off the mortgage. He dies, leaving everything including the house to his wife. Son leaves daughter-in-law, goes back to live with mother. Mother claims house is hers, wants ex-daughter-in-law out.

b) Issue: given that a license can be irrevocable against licensor (father) if the contract that creates it is irrevocable, is a subsequent 3rd party successor (mother) to the licensor then generally bound to honour it in favour of the licensee (daughter-in-law). There are certainly other, less general ways to make a license binding on 3rd parties:i) By acquiescence (i.e. estoppel) e.g. licensor allows licensee to spend money raising

expectation of irrevocability, and 3rd party acquiescent to this, then Equity may impose license on that 3rd party

ii) If 3rd party takes benefit and knew of the burden, may be bound by itiii) By a constructive trust to prevent unjust enrichment at licensee’s expense

c) Decision: i) Exclusive possession is prima facie a tenancy, but if the occupier was granted a personal

privilege then they are a licensee. If the license arises out of a unilateral contract where acceptance is through the performance of some act (payment of mortgage here), the license cannot be revoked once performance of that act has begun (it only ceases to bind if the act is left incomplete and unperformed).

ii) Thus the couple here were licensees having a permissive occupation short of tenancy, but with a contractual or at least an equitable right to remain so long as continued paying instalments, and would ultimately get title (so here is an example of how can have exclusive possession with a license)

iii) “Contractual licences have a force of their own and cannot be revoked in breach of contract (i.e. if revoking the license leads to a breach). Neither the licensor nor anyone who claims through them (i.e. successor) can disregard the contract & license except a bona fide purchaser for value without notice.”

iv) Thus the mother, a successor to the estate of her husband, is bound by the agreement he entered into, because she had received it by will and had notice so was not a “bona fide purchaser for value without notice”.

d) Comment:i) Hounslow used Denning’s reasoning from this case to create the new category of

contractual licenses. But Hounslow taken as the stronger precedent since judge in Hounslow was more conservative

ii) There is no dominant tenement here (license is just a personal agreement) but this case makes it possible to bind successors. Thus has effectively made a license a proprietary interest in land, much as Tulk v. Moxhay did with covenants.

iii) No subsequent cases have followed this case (used similar notion of constructive trusts) but perhaps becoming more acceptable

2) National Provincial Bank v. Ainsworth (1965) (English H.L.)a) Decision: A bare license is revocable on reasonable notice by both the licensor and

subsequent purchasers. A deserted wife living in a house owned by her husband has only personal rights against her husband, and has no license or interest in the land which would be enforceable against a third party purchaser.

b) Comment: This case is doubted and Canadian authorities haven’t followed it.

Personal property

Finders: rights + obligation to true owner, who exerted most control1) Finders applies only to a chattel that has been lost. This is only one of a number of ways of

giving up possession:a) May sell in contractb) May give away via a gift (requires the intent to give and the actual giving/delivery)c) Lost: possession and custody of an item are gone through involuntary accident or negligence

and they can’t be retrieved – finders applicable hered) Cache / hidden / mislaid: owner deliberately put property in a cache and then forgotten

where the cache is. The “treasure trove” principle applies here: if gold/silver then goes to king, otherwise goes to landowner

e) Abandoned: where true owner has intent to get rid of possession and has in fact got rid of possession (surrenders, relinquishes, disposes or gives up a chattel without reference to passing it on to someone else). If a person finds an abandoned item they become the true owner.

2) A person who finds a lost item does not have to take possession, and is not liable to the true owner if they do not. A finder who takes possession gets right as a finder (i.e. item might become theirs, but limited since the true owner and prior bailee have better rights) but also obligations as a bailee for the true owner or some prior bailee (thus finders are a nice example of bailment). To determine if taken possession, just picking something up and putting it back probably will not count, but if take it away or use it then yes, probably will be held as taking possession.

3) If you find something and you know/can find out who the true owner is, the item should go back to that true owner.

4) Consider an item (lost by the true owner) left on some landowner’s land.a) If the item was in / under / attached to the land, then the landowner has the superior claimb) If the item was only on the land, can look at the problem from one of two perspectives (and

sometimes come to different conclusions as a result):

i) Obligation approach: if landowner didn’t know it was there, has no obligation/liability to the true owner, but if they knew it was there, they become a bailee and owe a duty to take reasonable steps to locate the true owner. Thus knowledge important when considering obligations. In deciding who should get the item (the finder or the landowner, assuming can’t find the true owner), this obligations approach will suggest whoever owes an obligation to the true owner should get the item. So the landowner only gets an item that was on their land if they knew it was there e.g. Kowal

ii) Rights approach: in deciding who has the best right to the item (the finder or landowner, assuming can’t find the true owner) whoever had exerted / intended to exert the most control over the item should get it. So the landowner presumed to have property right to the item (albeit a weaker presumption when the item is on as opposed to in / under / attached to their land) regardless of whether they knew it was there (i.e. knowledge not so important when considering from a rights approach) e.g. Grafstein

5) Grafstein v. Holme & Freeman (1958) (Ont. C.A.)a) Facts: Employee found locked box in basement of store (it was covered in stuff, so might

think fixture if covered by relatively solid things, and might think cache or abandoned). Employee took it to store owner and asks him what to do with it (i.e. employee not exerting control / dominion / custody over it). Store owner is somewhat ambiguous concerning possession, saying “It’s not mine, you might as well just leave it on a shelf” (i.e. leave it here in the store). Two years later another employee looks at it, and the 2 employees open it, find a ton of bank notes ($38,000), put a new lock on it (splitting the cost of the lock between them, suggesting their intention to share as finders) and go to the owner and say “You’re rich”. But they all shake hands and employees suggest they should split the cash 3 ways, give the key to the new lock to the store owner, and store owner says he will talk to a lawyer. He comes back with a lawyer and says “It’s all mine”. Give cash to public trustee, put advertisements in newspapers, but no one comes forward to claim it.

b) Store owner claims it all belongs to him as land owner because:i) It was a cache (rejected by court)ii) It was lost but I’m prior baileeiii) It’s mine because of employee / employer relationship and found during course of

employment (rejected by court)iv) It’s mine because employee’s were trespassing (rejected by court)

c) Decision: the store owner gets it all.i) Wasn’t a cache nor abandoned, rather it was lost and therefore in the realm of finders (if

cache, store/land owner would have got it all, if abandoned employees might have rights).

ii) To be a finder must have taken possession (i.e. must exert de facto control = power to use and exclude others) when no one else had a previous claim or interest. So C.A. decided the question was who had exercised the most control over the box and it’s contents (i.e. it will be a very fact based discussion):(1) If item is in / under / attached to someone’s private land, the landowner will be

presumed to have control (and so will have a stronger claim to it), as opposed to if item is simply on their land in which case landowner still has presumption in their favour, but will be weaker. Note makes no difference whether the landowner is aware of the item’s existence.

(2) But someone can be a finder even though they find something on someone else’s private land (i.e. doesn’t have to be found on public land)

(3) Also look at parties intent to control

iii) In this case, the box was found two years earlier but the land owner had exercised some control over it by having it left there, and the first employee appears to have deferred to this. So store owner had possession of the box from that time.(1) If landowner had known of the contents at this time, would have had obligation to

true owner to secure such a sum of money, and simply putting the box on the shelf would not have been sufficient (so if, for example, the money had then gone missing, landowner would be liable as bailee to the true owner – similarly if gave it away to someone claiming to be the true owner, but didn’t take care to make sure it was theirs by asking questions such as do you have a key, or how much money is there).

(2) However, landowner didn’t know of the sum of money at this time (what would you reasonably think was in a locked box under a pile of garbage – tools perhaps).

(3) Thus knowledge is important when determining the obligation to the true owner.(4) Note had no obligation to open the box to see what was in there.

iv) Concerning the contents of the box, the 2 employees claim they revealed it’s contents to the store owner, but not as part of their employment (this is what led to the claim of trespass). Held that store owner had prior custodial control over the contents.

6) Kowal v. Ellis (1977) (Man. C.A.)a) Facts: A $450 dollar pump was found by P on (i.e. not under) D’s land. It was lying

unattached on the ground.b) Issue: who gets the pump? The finder or the landowner? Was landowner a prior owner (e.g.

if pump had been abandoned or cached on their land) or a prior bailee (if accidentally lost)c) Decision:

i) A finder becomes a bailee if they take the item into their possession. No rights or obligations arise from the finding itself unless he takes possession of it, after which the finder is responsible to take reasonable steps to locate the true owner.

ii) If an object is in, attached to or under the land it belongs to the land owner, but if it is just on the land it is not a fixture (as is the case here)

iii) The court asked: did the landowner have any obligations towards the true owner of the pump before the finder found it? I.e. was the land owner a prior bailee? The key criteria is whether the landowner knew it was there (in Grafstein court held that it did not matter if the landowner knew it was there when considering if he had a right to ownership. But here considering the issue from an obligations approach, so knowledge is important). Finding the landowner did not know it was there, and because it was just on the land, court decided the landowner couldn’t have been a bailee and thus the pump belonged to the finder.

iv) Other cases have just asked whether the land owner had exercised any control over the item (using the rights approach)

v) The issue of trespass did not arise here since the finder had permission. Court stated that it does not know how to rationalize a trespasser who is a finder.

7) Parker v. British Airways Board (1982) (English)a) Facts: Man found gold bracelet in Executive lounge at the airport (a relatively exclusive

place with a system to restrict who can be there, but there was no lost property system in place). Finder left it with B.A. with instructions that if no one claims it he wants it, and he left his name and address (i.e. honest, but still exercising degree of control). B.A. sold it. Finder sued, got the selling price of the bracelet plus interest in damages. B.A. appeals.

b) Decision: appeal dismissed.i) Court took a rights perspective. Asked if the fact that the bracelet was in the executive

lounge at the airport meant it was under sufficient control by B.A.

ii) They laid out the rights and obligations of the finder and the occupier of the building in detail:(1) Rights/obligations of finder:

(a) Finder only gets rights if item is lost/abandoned and they take it into their care/control.

(b) Finder acquires very limited rights if they had dishonest intent (e.g. perhaps they are more a converter than a finder) or were trespassing (don’t want to reward trespassing, but not answered if trespasser can never get right)

(c) Finder acquires right to keep it against all but the true owner (and representatives of the true owner) and anyone who can assert a prior right that existed before the finder “found”.

(d) If employee finds in course of employment, employer is finder(e) Finder has an obligation to reasonably try to find the true owner.

(2) Rights/obligations of an occupier:(a) If the object is in / attached to the land or a building, strong presumption in

favour of the occupier over the finder, regardless of whether they knew it was there.

(b) If the object is only on / in (but not attached) to a building, only a weak presumption in favour of the occupier over finder, and must ask if before the item was found, did the occupier manifest an intention to control the building and the items found within it.

(c) If an occupier has expressed such an intent, then is under an obligation to reasonably ensure that lost chattels are found and returned to the true owner.

iii) Discussed policy:(1) What is the best approach so that the true owner will be found – probably the

landowner should get the item since a true owner would most likely ask them if they had found it

(2) What is the best approach so that a finder does not become a “concealed keeper” (i.e. just pick it up and walk away with it) – need to give a finder a chance of ownership if they hand it in

(3)iv) In this case, since B.A. had no public policy for lost and found items, and the control

they exercised over the lounge had less to do with found items and more to do with classes of passengers and keeping out bombs, the judge decided that B.A. did not manifest a sufficient intent to control items found in the building, and the bracelet thus goes to the finder.

Bailment: taking of possession/control, returning same object, obligation to take care1) Bailment is the temporary, voluntary taking into custody of chattels which are the property of

another. Bailment is a common law proprietary relationship that comes about by the bailee taking possession of the bailor’s property. The bailee gets property rights exercisable against everyone other than the owner or prior bailee.

2) Bailment is different from sale or gift (no title to the object is given, just a temporary possession). It is also different from a license (a bailee takes possession and so is liable to take reasonable care of the bailor’s property, but a licensor does not take possession and so is not liable e.g. if friend leaves a bag with you, if you move the bag and leave it under an open window where rain comes in and damages it, you are liable if it was a bailment).

3) A contract is not necessary (bailment is older than contract, and also has nothing to do with equitable trusts). E.g. a finder is a bailee for the true owner (there is no contract involved). Bailments often are, however, associated with a contract e.g. hiring a car. In such cases the contract can modify the terms of the relationship.

4) Definition from Morris v. C.W. Martin (1965) (English). Ask in this order:a) Has there been a bailment? I.e. was the item taken with the intent to take possession?b) The bailee has obligations in tort: in negligence to take reasonable care of the goods (and for

conversion if transfer to someone else, and for detinue if fail to return). Duty of care on a bailee:i) Bailments for the benefit of the bailor alone i.e. bailee takes custody of the goods (to

carry or do something to them), receives no payment, and can’t use them (would otherwise represent a benefit): Gratuitous mandate – bailee liable only for gross negligence (i.e. low standard of care on bailee)

ii) Bailments for the benefit of the bailee alone i.e. gratuitous loan where bailor lends chattels to the bailee for their use: there is a high standard of care on the bailee, so will be liable for the least neglect (the item can only be used for the purpose for which it was lent)

iii) Bailments for the benefit of both (e.g. pawn where goods are given as security for a loan or other debt, hire where goods are left with the bailee for their use with payment made to bailor): ordinary standard of care on the bailee

c) Burden of proof is on bailee to show appropriate level of care was taken.d) If there is a contract then exemption clauses limiting liability will apply

5) Lesson v. Jones (1920) (N.B.C.A.)a) Facts: P made arrangements with D to pay him $5 a month to store his car in D’s garage. D

assured P that his car would be safe. The car was damaged.b) Issue: Was there a bailment here (and hence liability for the damage) or was D simply

providing space for P’s car?c) Decision: Judgement for D since no bailment here (rather a license to use space in the

garage). To determine if bailment, focus is on possession / custody / taking control. Bailment is the delivery of something of a personal nature by one party to another, to be held according to the purpose or object of the delivery, and to be returned or delivered when that purpose is accomplished. There was no such taking of possession in this case since P maintained:i) Possession of the car key andii) Had access to the garage at any time to retrieve the car without D’s cooperation.

6) Crawford v. Kingstona) Facts: Possession of cows taken, and there was a contractual obligation to return the same

number of cows (although didn’t have to be the exact same cows)b) Decision: bailment is concerned with taking possession of an object and then returning that

very same object. So in this case not bailment, since contract would allow sale and replace.c) Comment: With bailment there is no transfer of title. Further, in some cases legislation

might specify a certain type of deal is a bailment even though it would not satisfy the normal requirements (such as intent to return actual items as in this case).

7) If there is a bailment of chattels (e.g. bailee takes delivery of possession of bailor’s parked car) then gives bailee rights (e.g. to move the car around at their convenience) and also imposes obligations (to take care, hence giving rights to bailor). Onus of proof is on bailee to show took appropriate level of care (with parking, mutual benefit, so ordinary standard of care) and if not, liability unless there is a contract limiting it. If however, only a license to park car, then not

same duty of care on car park operator (other than usual tort negligence e.g. not to drive fork lift truck into it). So often a matter of deciding whether there is a licence or a bailment. E.g. Heffron v. Imperial Parking (1974) (Ont. C.A.)a) Facts: owner parked the car themselves before leaving the keys with the attendant. There

was an exclusion clause on the ticket stating not responsible for car and contents. The car went missing (no one knew what had happened).

b) Decision:i) Decided the land owner was a bailee, since land owner had set up a system to take

possession / control / custody of the items on their land, a finding based on the following factors:(1) Car could be moved around at land owner’s convenience.(2) Keys give means of control, and were left in possession of land owner at their

request (as opposed to, say, leaving keys with attendant just because attendant doing you a favour and parking your car for you)

(3) Ticket with serial number indicates a system of retrieval i.e. have to show it to get your car back (as opposed to ticket simply being a receipt for payment)

(4) Provision of an attendant by the parking company to, apparently, look after the cars (as opposed to attendant simply being there to take payment – might look at whether attendant can see the cars from their booth, if they supervise things, etc)

(5) Had a system in place to return keys after hours(6) Had hours posted

ii) The onus rests with the bailee once the bailor proves non-delivery to show that he took reasonable care. This then raised the issue of the exclusion clause.(1) Concerning the exclusion clauses in the contract, referred to Bata v. City Parking

(1974) (Ont.C.A.) where there were signs in the area stating that “fee is for use of space only” – the court in that case said was not an exclusion clause, but rather reflected the “true nature of the relationship” i.e. license as opposed to bailment.

(2) In this Heffron case, the exclusion clause was not about the relationship, but was an attempt to limit liability. In this case, failure to redeliver the car (and with no explanation as to what happened) was a fundamentally breach, which meant the exclusion clause did not apply. Further, possessions in the car were covered if they are the type of things that might be reasonably expected to be in the car e.g. tools, clothing, radio, etc. (interesting to think about how types of items expected might vary from place to place e.g. in vacation area v. downtown business district).

Sub-bailment: if sub-bailee knows bailee not owner, then liable to owner, limits not applicable1) Sub-bailment is like sub-leasing, or sub-infeudation, sub-contractors, etc. 2) Morris v. C.W. Martin (1965) (English)

a) Facts: gave fur to bailee to clean. Bailee, with owner’s knowledge, contracts with and sends it to sub-bailee (on bailee’s own initiative) to do the actual cleaning. Sub-bailee’s employee, when told to clean it, steals it. Owner wants to sue sub-bailee, but the sub-bailee has an exclusion clause in their contract with the bailee, and the owner was not aware of the terms of that contract. Note there was no question of agency here (i.e. bailee was not contracting with sub-bailee acting as agent for owner – if this had been the case, then there would be privity of contract between the owner and the sub-bailee)

b) Issue: can the owner directly sue the sub-bailee, or does the claim have to go down through the chain (i.e. owner dues bailee, bailee sue sub-bailee). Also at issue was whether the exclusion clauses of sub-bailee would apply to the owner, but not answered here.

c) Decision:i) Diplock / Salmon:

(1) Sub-bailee voluntarily took possession of owner’s property, knowing it did not belong to the bailee (although didn’t know who the owner was). Since sub-bailee was aware of distant owner, it set up a bailment between owner and sub-bailee, and so sub-bailee is liable to owner. This is independent of contract (there was no contract between owner and sub-bailee). Somewhat similar reasoning as with notice, and outcome would have been different if sub-bailee had no knowledge someone else owner the object.

(2) The scope of the exemption clause was not applicable in this case so it wasn’t considered if it would have applied between the owner and sub-bailee

(3) Employer was found vicariously liable for the conversion by their employee since employer had given the coat to that employee for cleaning

(4) After reading Denning’s decision (which came to same result but by different approach) said: “The beauty of the common law is that it is a maze and not a motorway”

ii) Denning: owner can sue sub-bailee if she had right to take immediate possession. Otherwise, can only sue sub-bailee directly for permanent injury or loss. Compares it to a lease, where lessee (but not owner) can sue for trespass, but owner can still sue for permanent injury or loss (i.e. damage to reversion). So must ask: does sub-bailee have a right to exclude true owner from possession.

3) The issue left open in Morris was dealt with in Punch v. Savoy (1986)a) Facts: owner gave jewellery to Savoy to clean. Savoy, insured it for $100 and sent it by

registered mail to Walker in Toronto. Walker cleaned it, but there was a mail strike so they used Rapidex Courier (4th party) to send it back (different from Martin – the owner did not know that the ring would be sent). It never got back.

b) Issue: assuming that sub-bailee has liability to true owner since knows it belongs to someone other than bailee, can sub-bailee rely on their contract with bailee to limit their liability to the owner. From point of view of undertakings, would answer yes (sub-bailee only undertook to do something according to their contract with bailee), but from point of view of owner, seems unfair they should be bound by something they were not aware of.

c) Decision: Savoy and Walker were liable for negligence for not insuring it enough (standard of care for a bailee is that of a prudent owner). CN tried to rely on exemption clause, but in a bailment situation, a limitation of liability can only be relied upon if the original owner expressly or impliedly assents to it.

Gifts

Gifts: capacity to give & receive, inter vivos requires intent and delivery (cohabiting tricky)1) For a gift to be valid, must have both:

a) Legal capacity to givei) If you don't have legal title you can’t give it (i.e. nemo dat – can’t give what you haven’t

got).ii) Must also have the “mental” capacity (i.e. mentally defective persons, children,

intoxicated persons, and corporations who don’t follow their own regulations)b) Legal capacity to receive

i) In certain relationships the law will not allow gifts due to concerned about abuses of confidence, undue influence, inequality of bargaining positions (e.g. solicitor/client: the

client wants to leave money to his lawyer in his will, it will be invalid unless the client goes to another lawyer for independent legal advice, similarly with doctor/patient, and with parent/child to some extent).

ii) In the past there were also certain public policy concerns making some gifts invalid (e.g. “a gift to all my future illegitimate children” used to be disallowed due to concern of promoting immorality)

2) Gifts can be made on one of 3 ways:a) Inter vivos – requires 2 steps for gift to be valid:

i) Must be an intent to give(1) Evidence must show that the donor intended to divest themselves of possession of

the property, and not simply give possession as a bailment for example.(2) The words used have to be very clear/unambiguous, and sufficient to change the

ownership (not just create a bailment or a license). If there is any doubt it is assumed that the smallest transfer was given (e.g. “the dog is your responsibility now” said in the heat of frustration is not good enough to create a gift)

ii) Must be delivery or deed(1) Actual delivery of the object to the donee is required, unless gift is made by deed

(and the deed is signed, sealed, and delivered). So not enough to just say by words or in writing that you are making a gift. Delivery is not merely evidence of a gift having been made, it is an essential element of the gift itself.

(2) Constructive/symbolic delivery: when you can’t actually physically hand over an object you can hand over something which will transfer control of the chattel e.g. hand over keys to a car.

iii) Until both intent and delivery have occurred (they may occur at the same time, or either may come before the other) a person is free to change their mind, and intention alone to give a gift cannot be enforced. After that, however, gift cannot be revoked.

iv) With people living in the same place there is often difficulty showing delivery, since both the donor and donee might continue to use the chattel (so unclear if donor really giving gift or just letting donee use it). This might apply to housemates, siblings, spouses, etc. Often ends up in court when one of the parties (e.g. donor in Re Cole) goes bankrupt, and trustee in bankruptcy is looking for all their assets to pay their creditors. E.g. Re Cole (1963) (C.A.)(1) Facts: Husband goes bankrupt. Both wife and husband claim husband gave all the

furnishings as a gift to the wife. He show her the house, she touched some of the furnishing, and he then said “all of this is yours” (i.e. claiming symbolic delivery). At trial it was accepted that both the husband and wife believed the gift to have been made. However, the trustee in bankruptcy disputes the wife’s claim, pointing out, for example, that the goods were still insured under the husband’s name

(2) Issue: had there been an effective delivery to make this gift valid?(3) Decision: No, judgement for the creditors

(a) In order to transfer property by gift, there must be either a deed or instrument of gift or there must be actual delivery of the thing to the donee (i.e., a change in possession, like livery in seisin).

(b) Merely bringing someone near to chattels and letting them handle them is not sufficient to constitute delivery (it would have be sufficient if the donor had then left, leaving the chattels with the donee, but that did not occur here since both donor and donee lived in the same house, and so there was no clear change of control)

(c) In a spousal situation and in cases where both persons are in a common establishment, a deed or contract of sale (say for $1) is necessary – mere words alone are not enough because there is no clear change in possession, and possession will stay where title was originally

(4) Comment:(a) Had the couple transferred the insurance of the chattels to the wife’s name, wife

might have succeeded since that would be good evidence of transfer(b) This might be decided differently today

b) Donationes Mortis Causai) A gift made by a person who, apprehending their own death, delivers to another the

possession of any personal goods to keep as their own in case of the donor’s death. If the donor dies the donee receives the gift absolutely, but if the donor lives the donee has to give it back. Until the person dies it is a bailment, and if they die the gift is completed.

ii) Used to be applied strictly e.g. in Thompson v. Meecham, (1958) (Ont. C.A.) the death had to occur from peril contemplated, that peril cannot be just an ordinary risk of living, and it needs to be an extreme / pressing danger which will not allow the time to make a will (in this case man feared flying, gave his car to his girlfriend, went to airport and died of heart attack – wife successfully sued for the car). Such a strict approach has not been applied widely however.

c) By will